Private developers are planning and developing residential subdivisions at a near-record pace in Bulloch County, while shortages and skyrocketing prices of building materials have contributed to a lingering shortage of new homes on the market.
In early July, Bulloch County Zoning Administrator Randy Newman, who has served in that capacity since 2007 after starting as a building inspector in 2000, provided a list of 23 "active" subdivisions containing approximately 1,240 home lots or units. These are the current and future neighborhoods involved in the county's approval process, from those with zoning changes requested to those nearly built out but still needing permits for home construction.
“This is probably the most we’ve had since I can remember in my being with the county, the most subdivisions and startup subdivisions,” Newman said.
So it is a busy time for the Building and Zoning Department, which consists of Newman, two building inspectors, two code enforcement officers and three clerical staff members.
The county has regulatory jurisdiction only in its unincorporated area, so the relatively small number of subdivisions under development within Statesboro and the other towns are not included in Newman's total.
His list counts a number of lots on which homes have already been built and sold, and at least two of the subdivisions are nearly built out.
But he labeled eight of the 23 subdivisions as “in development stage,” meaning they are going through engineering and permitting steps with no home construction or even road construction having occurred yet. Those eight future neighborhoods together contain 468 proposed home lots, and most of the other subdivisions on the list have substantial numbers of unbuilt lots.
‘Busier than ever’
With 471 lots in six active subdivisions, Robert K. “Robbie” Bell Jr. is the developer with the most activity on the list. He was also the one who is purely a developer, and not also a homebuilder or real estate agency owner, of the three developers interviewed for this story. These were out of 11 developers responsible for the 23 subdivisions.
To be clear, a developer is someone who secures land and hires surveyors and engineers to plan the subdivision. Developers then hire contractors to build paved roads or streets, as required within subdivisions in Bulloch County, and install storm sewers and sometimes sidewalks, streetlamps and greenspaces. They also work with water companies to install community water systems and with other utility companies for connections.
But Bell sells the lots to builders who build houses and sell them. He compared business from the 2020 pandemic months until now to a previous peak demand year before the 2008 recession.
“Surprisingly, we’re busier than ever,” Bell said, “and it’s about where it was back in ’05, but right now we have a shortage of houses still, where back then we certainly had a glut of inventory, and depending on how well the economy holds up and how many houses are put on the market, we’ll see what happens.”
His two largest active subdivisions are both southeast of Statesboro, but target two different core markets. The largest, River Bluff subdivision off of Eldora Road near the Bryan County line, is planned for 195 lots and should appeal especially to people who work in Savannah, he said.
Closer to Statesboro and so better positioned for people who work here, Chatham Place Section II contains 85 lots. From Burkhalter Road, it is at the end of Herman Rushing Road, and across from the previously built-out original Chatham Place. Several homes are currently in various phases of construction, by builder Keystone Homes, in Section II.
Low interest rates
“Prices continue to go up, but demand stays strong,” Bell said. “We can only attribute that to the fact that interest rates are still at historic lows.”
The Federal Home Loan Mortgage Corporation, at www.freddiemac.com, listed an average “commitment” interest rate in June of 2.98% on a 30-year fixed-rate mortgage, up from 2.74% in February. As recently as 2018, rates for the year averaged 4.54%, and back in 2000-2001 they were around 7% and 8%. Freddie Mac’s online history shows that 40 years ago, in 1981, the average mortgage rate was 16.63%.
“It is an extremely strong time for construction in an unusual year, when building materials are at an all-time high but interest rates are at an all-time low, so you hope that you save enough on your interest to pay for the increased cost of construction,” local homebuilder and developer Keely NeSmith Fennell said last week.
High material costs
Standard lumber prices soared more than 300%, from about $350 per thousand board feet in April 2020 to about $1,500 in May 2021, but have since fallen almost 70% from that peak, according to reports in the Associated Press and Fortune.com. At this point, that leaves average lumber costs about 50% higher than where they started.
But Fennell said she is still getting notices of price increases, which have not been limited to lumber.
“Concrete materials have gone up, brick, sheetrock, flooring, plumbing materials, electrical, appliances,” she said. “You name it, it’s gone up.”
Fennell and her brother, Kyle NeSmith, operate NeSmith Construction Company, and their father, Donald NeSmith, also remains active in land development and construction. He is the named developer in three subdivisions on the county’s “active” list.
Sunfield Station on Cawana Road is shown as having 63 lots and being “in development stage.” Fennell confirmed that this is a new development, undergoing engineering work and with no roads or even a sign yet.
“The only thing that I have that is truly turnkey ready in that I’m working on the engineering is Sunfield Station, and we hope to be building houses in there in the early part of 2022,” she said.
Meanwhile, NeSmith is part of a proposal to develop a 239-home subdivision, including 209 townhome units and 30 detached houses, within the Statesboro city limits off Fair Road, with a street linking to Cawana Road not far from Sunfield Station. Of course, this is not on Newman’s list.
City Council approved a zoning change for the in-town subdivision in May, but it remains farther from reality than Sunfield Station.
“My project in the city, we don’t have any definite plans on starts or engineering. …,” Fennell said. “We’ll try to determine a game plan to move forward with that.”
Bubba Hunt, owner of RE/MAX Eagle Creek Realty, appears on the county subdivision list in the new role, for him, of developer. He and a partner plan to build 64 townhouse units in a subdivision called Fraser Field on Old Riggs Mill Road. This neighbors the existing Bull Bay subdivision, which Hunt also had a part in developing after a partner investor purchased it.
But this is Hunt’s first completely new development. After signing off on the plat last week, he hopes to start building the first eight of the townhomes within 45 days. He and the partner haven’t decided, but they are now thinking about turning Fraser Field into a nice rental neighborhood, with sidewalks and a playground, instead of selling the townhomes.
From the real estate side, Hunt sees unmet demand both for rentals and single-family houses, he said. In 2019, his agency’s first full year in business, its agents sold $50 million worth of homes, and last year, despite the pandemic, $57 million worth, he said.
Meanwhile, all local real estate agencies combined have for months now been marketing about 70 Bulloch County homes at any one time, compared to 300 to 400 in more typical years, Hunt said.
“When we used to hear from Atlanta markets where they’d get four, five and six offers on a house as soon as they put it on the market, we’re seeing that in Bulloch County, and we’re seeing it from people coming from all over the country,” he said.
Many builders simply stopped building for several months last year while materials were in short supply, and the resulting shortage of new houses coming onto the market drove up prices for existing homes, Hunt observed.
Numbers supplied by RE/MAX Eagle Creek Realty from the Georgia Multiple Listing Service database indicate that the average sold price of an MLS-listed Bulloch County single-family home rose from $186,111 in 2019 to $198,187 in 2020 and $215,321 so far in 2021, through July 27.
With so many subdivisions in the works, “it’s going to come to us,” Hunt said. “I just don’t think it’s going to happen probably until the end of 2022, honestly, where we start seeing an influx of more homes on the market.”