Savannah, Georgia, Challenged by Surging Market Demand
If you haven’t heard about the Port of Savannah, then you are missing what is literally one of the biggest things to happen to southeastern real estate in 2019.
Here’s what’s happening:
The Port of Savannah has long been a major U.S. seaport and one of the most important ports on the eastern seaboard. However, about a decade ago, the port had nearly reached capacity, which led to an outcropping of “inland ports,” essentially rail stations equipped to very quickly load and unload cargo from tractor trailers to train cars, throughout rural Georgia. They connect many interior rural towns in Georgia to the Port of Savannah without overtaxing the rail and transport terminals in Savannah. This is vitally important to the long-term sustainability of the Port of Savannah, which is currently in the middle of a long-term plan to expand the harbor and add more than $282 million in “annual benefits to the nation,” according to the U.S. Army Corps of Engineers.
When the project is complete, larger cargo ships will be able to enter the Port of Savannah with heavier and larger loads. The “workday” for the Port of Savannah will also extend because the ships will be able to sail in lower ties. Interestingly, there has been little environmental outcry, relative to that associated with comparable projects, because of the heavy emphasis the Army Corps has placed on mitigating the environmental impact of the dredging. In fact, the Savannah River was part of the testing process for an oxygen injection system nicknamed the “iron lungs” for the river.
What does all of this have to do with Savannah, Georgia, real estate and home values in the surrounding rural areas? Quite a bit, as you might imagine. In Savannah alone, those millions of dollars in “annual benefits” will flow directly through the city’s local economy, which has led to ongoing economic expansion in the municipal area, consistently rising home prices in the lower and middle tiers of home values in particular, and a strong demand for new development.
That growth is not limited to the Savannah metro area, however. In fact, according to industry data analyst Frank Norton, Jr., cited the inland ports as “one of the biggest economic development in North Georgia right now.” This is despite the fact that Savannah is located in South Georgia! Norton noted there is a particular demand for properties in the sub-$250,000 range, which is usually a difficult range for builders but much more accessible for real estate investors – especially those working with established sources of properties that may be renovated rather than built new. Norton said Savannah and the surrounding markets could insulate the Georgia market from an economic downturn in 2020 or later.
“We have a very low inventory of houses, have not had overbuilding of houses, a strong job market, and a climate where people still want to retire here,” he said. Analysis like this is why Strategic Passive Investments has maintained an active presence in the Georgia real estate market and in the Savannah area in particular since long before the Port of Savannah started to make headlines. We currently operate an established investing business in the Savannah area and routinely acquire new properties in the area for our investors.