Rents in some Savannah neighborhoods have grown by as much as 33% in the last three years, nearly triple the state average. Population and job growth, lack of land for new development, and a high quality of life are just a few of the reasons why the demand for real estate in Savannah is so strong.
Savannah, Georgia is located along the Savannah River, about 20 minutes from the Atlantic Ocean and 3 ½ hours by car from Atlanta. Originally founded as a British colony in the early 1700s, the city was a key port during the American Revolution and Civil War.
Today, the city is a thriving seaport community and home to a diverse mix of industry including manufacturing, healthcare, high tech, tourism, and film. In fact, Georgia ranks #1 globally in the production of top grossing feature films, ahead of entire countries like the United Kingdom and Canada and much larger states such as California and New York.
Keep reading to learn why the Savannah real estate market is worth considering in 2020.
Population growth in the Savannah MSA has been amazing over the past eight years, according to a recent article in Georgia Trend. Many new arrivals to the area live in the suburban bedroom communities surrounding the City of Savannah, creating a workday commute that’s similar to rush-hour in Atlanta.
Key Population Stats:
- City of Savannah is home to more than 145,000 people and nearly 400,000 in the Savannah metro area.
- Chatham County (where Savannah is located), along with Bryan and Effingham counties make up the Savannah MSA.
- Savannah is the 5th-largest city in Georgia and the 3rd-largest MSA in the state.
- Over the past 10 years the Savannah metropolitan area has added nearly 100,000 new residents.
- In the next five years the City of Savannah is forecast to gain about 6,000 new residents and about 12,000 new residents by 2030.
- About 50% of the people living in the Savannah MSA are in the prime working age group of 20 – 55 years old.
The Savannah MSA has been described as an “economic star” with a broad foundation for the future. Defense and aerospace, tourism, healthcare and education, and the city’s deepwater seaport are just a few reasons why the job market in Savannah is staying strong and steady.
Key Employment Stats:
- GDP of the Savannah MSA is more than $22 billion, according to the Federal Reserve Bank of St. Louis, and has grown by about 47% over the last 10 years.
- Forbes reports that job growth in Savannah was 2.6% last year while the current unemployment rate is only 2.7%.
- After expanding over the past several years, job growth in Savannah is expected to hold steady this year.
- Key industry sectors in Savannah include transportation, tourism, military and defense, manufacturing, healthcare, high tech and innovation, and film and entertainment.
- Largest manufacturing employers in the Savannah area include Gulfstream Aerospace Corporation, chemical company SNF, Georgia-Pacific Savannah River Mill, and International Paper.
- Memorial University Medical, Walmart, Kroger, marine cargo handling company SSA Cooper, Publix, and East Georgia Regional Medical Center are some of the largest private sector employers in metro Savannah.
- Large public sector employers include Savannah-Chatham County Board of Education, Ft. Stewart/Hunter Army Airfield, Georgia Southern University, and the City of Savannah.
- Major colleges and universities in and around Savannah include Georgia Southern University – Armstrong Campus, Savannah College of Art and Design, and Mercer University.
- 89% of the residents in the Savannah metro area are high school graduates or higher, and more than 30% hold a bachelor’s degree or advanced degree.
- Interstate highways I-16, I-19, and I-516 pass through the city, with major metro areas such as Atlanta, Charlotte, and Jacksonville within 250 miles or less of Savannah.
- Port of Savannah is one of the top four container ports in the U.S. and is the fastest-growing deepwater seaport by container volume over the past 10 years.
- Georgia Central, CSX, and Norfolk Southern provide freight rail service in Savannah.
- Savannah Hilton Head International Airport (SAV) provides passenger and air cargo service to daily non-stop destinations such as Atlanta, Baltimore, Boston, Chicago, Dallas, Miami, and New York City.
Real Estate Market
Coastal real estate markets like Savannah have returned to the boom days of real estate, according to a recent report from the Savannah Morning News. Job growth and the overall economic success of Savannah and Georgia are helping drive the demand for housing as developers struggle to keep up.
Key Market Stats:
- Median listing price of a house in Savannah is $241,990 while the median selling price is $176,500, according to Zillow (as of January 2020).
- Square foot listing price of a home in Savannah is $124, the same as in the Savannah metro area.
- Homes values in Savannah increased by 5.2% last year and by 34% since October 2012, based on the Zillow Home Value Index.
- Average days on market is 67.
- During the listing period 16.7% of the houses for sale in Savannah have a reduction to the asking price.
- 13.9% of the homes in Savannah have a negative equity vs. 8.2% U.S. average.
- 1.3% of the homes in Savannah have a delinquent mortgage vs. 1.1% nationally.
- Some of the most popular neighborhoods in Savannah include the Historic District, Victorian District, Ardsley Park, and Southside.
Attractive Renters’ Market
WJCL news station in Savannah recently asked the question, “Why is rent in Savannah getting so much more expensive?”. In fact, over the past three years, rents in some parts of Savannah have grown by as much as 33%.
Part of the reason is that Savannah is an arts and film destination, with landlords offering month-to-month leases at much higher rents than long-term. Another reason is the lack of smaller apartments and high-rises due to city building restrictions, which is driving more tenants toward single-family rentals in Savannah.
Key Market Stats:
- Median rent in Savannah is $1,299 per month vs. $1,371 per month in the Savannah metro area (as of January 2020).
- Rents in Savannah increased by 3% last year on average, according to RENTCafé.
- 43% of the households in Savannah rent rather than own.
- 90% of the rental units in Savannah have rents of between $701 and $1,500 per month.
- Most affordable neighborhoods for renters in Savannah are near the Savannah International Airport, SPA Industrial Park, and Hudson Hill–Bayview where rents range between $785 and $798 per month.
- Most expensive neighborhoods for renters in Savannah include Thomas Square, Victorian District, and Yamacraw Village where monthly rents average $2,048.
- Lowry Park, Sulphur Springs, and Riverbend where rents range between $1,001 and $1,046 per month are three of the most affordable neighborhoods for renters in Savannah.
- Three of the most popular neighborhoods for renters in Savannah are Bradley Pointe South Area, Godley Station, and Wilshire Estates–Savannah Mall.
Historic Price Changes & Housing Affordability
When analyzing a specific market for investment, buyers of rental property often review historic home price changes and the affordability of housing in the area.
Pricing trends can help investors forecast the potential for future appreciation, while housing affordability is an indicator of what the likely demand for rental property will be.
The Federal Housing Administration (FHA) publishes a quarterly house price index report with the latest price trends for various markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for Savannah, Georgia shows:
- Over the last 5 years house prices in Savannah have increased by 30.76%
- Over the past one year house prices in Savannah have increased by 6.60%
- Last quarter house prices increased by 1.13% in Savannah
The HAI – or housing affordability index – compares the median family income in a market to the median price of a single-family resale home.
Using 100 as a baseline number, the HAI index provides a ranking of the local housing market. The greater the affordability index number is above 100, the more affordable a market is to own a home, assuming a 20% down payment and a conventional mortgage.
The housing affordability index for Savannah (as of July 2019) is 104 compared to 143 for the entire State of Georgia. This means that Savannah is one of the most expensive places to own a home in the state, indicating a potentially strong demand for rental property in the Savannah metro area.
Quality of Life
Founded back in 1733, Savannah is the oldest city in Georgia and home to the Savannah Historic District, the largest National Historic Landmark Districts in the country. Millions of people visit Savannah every year, attracted by the city’s historic and waterfront districts, subtropical climate, and Southern hospitality.
Key Quality of Life Stats:
- Cost of living in Savannah is 3% below the national average.
- Forbes ranks Savannah #19 in cost of doing business, #42 in job growth, and #74 as the best place for business and careers.
- Niche.com gives Savannah “A” ratings for nightlife and diversity and says the city is the 60th best place to retire in the U.S.
- Three-hundred-year-old buildings on cobblestone streets and trees covered in Spanish moss along the Savannah river add to the area’s scenic charm.
- Savannah College of Art and Design helps give the city a cool, artsy vibe.
- Beaches along the Atlantic Ocean are just a 30-minute drive from Downtown Savannah.
- Memorial Health University Medical Center is ranked as one of the best hospitals in Georgia by U.S. News & World Report.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Savannah based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
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