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CITY TALK: Have we recovered from the housing bust?

Remember the housing boom and subsequent bust?
 
That’s a rhetorical question. Of course you remember it. But are you still living with the effects of the bursting of the housing bubble?
 
That’s a more complex question, and the answer largely depends on where you live and when you purchased your home.  
 
Those of you who have bought houses in the last several years might also be feeling the lingering impacts of the housing crisis, even if you don’t realize it. If you bought in a neighborhood that has not fully recovered, you might have enjoyed a low purchase price, but you might be facing a long period of home value stagnation.
 
The Washington Post recently published an interesting piece of data journalism — “America’s great housing divide: Are you a winner or loser?” — that allows readers to look at average home values by zip code for 2004 and 2015.
 
Around 2004, according to the article, “values escalated rapidly in the bubble, fueled by financial speculation, subprime lending and an abiding faith in homeownership as a sure-fire source of wealth.”
 
That “abiding faith” turned into outright hubris here in Savannah. We lagged the national trends, but the accumulating data made it glaringly obvious that home prices were going to collapse here as they were in other cities. Still, some investors and lenders continued to speculate into 2008.
 
So what has the recovery looked like for zip codes in Chatham County?
 
As I go through some numbers, you should obviously keep in mind that average home values might not reflect trends for different price points and that individual zip codes can cover many different neighborhoods.
 
In the 31401 zip code that includes downtown Savannah, the average home value increased from about $211,000 in 2004 to about $287,000 in 2015. That 36 percent jump might sound good, but it’s only slightly better than the inflation rate.
 
And the 36 percent increase in the 31401 zip code is better than every other zip code in the county for the 2004 to 2015 period.
 
For example, the 31415 zip code, which includes West Savannah, has only seen a 12 percent increase in home values. The average home value in 2015 was $113,277.
 
In a follow up to their original story, the Post explored the weak recovery in home values in predominantly black neighborhoods in the Atlanta metro area. In Savannah, we’ve seen weak recoveries in some areas that are mostly black and some that are mostly white, so the racial questions are especially difficult.
 
The 31408 zip code, which includes much of Garden City, has seen a 20 percent increase in home values between 2004 and 2015. The adjacent 31407 zip code has seen just a 6 percent increase.
 
Home values in the 31322 zip code, which includes Pooler, have also underperformed the inflation rate, with an increase of 11 percent. The 31302 zip code, which includes Bloomingdale, has experienced a 14 percent increase in values.
 
And the 31419 zip code, which includes some of Savannah’s Southside, has only seen an 8 percent increase in home values between 2004 and 2015.
 
Several zip codes have done moderately better. The 31405 zip code, which includes Ardsley Park and neighborhoods to the south and west, has seen a 27 percent increase. If we were able to break the numbers down further, we’d likely see wide variation within that zip code.
 
The recovery has been solid for most of the east side and the islands. Home values are up 30 percent in the 31404 zip code, 28 percent in the 31406 zip code, 23 percent in the 31410 zip code and 21 percent in the 31411 zip code.
 
Tybee Island saw a big jump in home values early in the 20th century, but in 2015 the average home value of $397,153 was just 8 percent higher than in 2008.
 
In sum, it seems that Savannah area home values have recovered pretty well compared to many other parts of Georgia and compared to other areas along the southeast coast.
 
But where do we go from here?
 
Will the downtown area and the islands continue to outpace the rest of the metro area? Will we eventually see a sharper increase in values in West Savannah and other largely black neighborhoods? What will happen to values in West Chatham as development accelerates?
 
Stay tuned.
 
City Talk appears every Tuesday and Sunday. Bill Dawers can be reached via billdawers@comcast.net. Send mail to 10 East 32nd St., Savannah, Ga. 31401.

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