charleston sc market update - 2009

Charleston

Market Conditions

October 2009

Market Update2009

www.Aptindex.com

(704)369-2345

Employment…

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%1996

1997

1998

1999

2000

2002

2003

2004

2005

2006

2007

Jo

b G

row

th R

ate

Building Permits…

0

2,000

4,000

6,000

8,000

10,000

12,000

Pe

rmit

s Is

su

ed

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

Boom market…

Housing Bubble (2003-2007) created the boom market

Excess housing supply Renters become ownersExcess for-sale market becomes ‘Shadow Market’

Renters to Owners…

Housing BubbleRenters become Owners…Reducing demand for apartments

Apartment Demand

-500

-250

0

250

500

750

1,000

1,250

1,500

1,750

2,000

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

Un

its

Ab

sorb

ed

Actual Demand

Forecast Demand

Boom to Bust…

Housing Bubble Bursts/ Recession (2008-2010?)Home prices fall…Excess for-sale housing supplyShadow rental market expandsEconomy in a recession…Job losses mount

Building Permits…

0

2,000

4,000

6,000

8,000

10,000

12,000

Pe

rmit

s Is

su

ed

19

91

19

93

19

95

19

97

19

99

20

01

20

03

20

05

20

07

20

09

YT

D

Apartment Permits…

0

100

200

300

400

500

600

700

800

900

1000

1100

1200

1300

1400

Nu

mb

er

of

Un

its

Sta

rte

d

Feb-05 Aug-05

Feb-06 Aug-06

Feb-07 Aug-07

Feb-08 Aug-08

Feb-09 Aug-09

Overall - Apartment Starts

Employment…

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%1996

1997

1998

1999

2000

2002

2003

2004

2005

2006

2007

2008

2009

2010

Jo

b G

row

th R

ate

??

Supply & Demand…

Supply vs. Demand

-500

-250

0

250

500

750

1000

Ju

n. '

95

Ju

n. '

96

Ju

n. '

97

Ju

n. '

98

Ju

n. '

99

Ju

n. '

00

Ju

n. '

01

Ju

n-0

2

Ju

n-0

3

Au

g-0

4

Au

g-0

5

Au

g-0

6

Au

g-0

7

Au

g-0

8

Au

g-0

9

Au

g-1

0

Au

g-1

1

Ap

art

me

nt

Un

it G

row

th

Supply Growth - 2 Yr. Moving Avg.

Demand - 2 Yr. Moving Avg.

Forecast

Occupancy & Rents…

Occupancy vs. Rent Growth

84.0%

85.0%

86.0%

87.0%

88.0%

89.0%

90.0%

91.0%

92.0%

93.0%

94.0%

95.0%

96.0%

Ju

n. '

95

Ju

n. '

96

Ju

n. '

97

Ju

n. '

98

Ju

n. '

99

Ju

n. '

00

Ju

n. '

01

Ju

n-0

2

Ju

n-0

3

Au

g-0

4

Au

g-0

5

Au

g-0

6

Au

g-0

7

Au

g-0

8

Au

g-0

9

Au

g-1

0

Au

g-1

1

Oc

cu

pa

nc

y R

ate

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Re

nt

Gro

wth

Rent Growth - 2 Yr. Moving Avg.

Occupancy - 2 Yr. Moving Avg. Forecast

Development…

Vacancy Rates…

Overall vacancy rate for the area is 11.1% down from 15.3%

Median vacancy rate among all communities is only 8.3%

Stabilized communities less than 30 years in age, vacancy rate is 8.5%

Class B properties generally outperforming class A and C

Submarkets…

Goose creek area has a vacancy rate of 13.5%

Higher vacancy among newer communities

Submarkets…

Mt. Pleasant’s overall vacancy rate is 10.9%

Excluding lease up and those more than 30 years in age, occupancy is 96%

Mt. Pleasant accounts nearly half of all units in the metro area that rent for over $1,000

Submarkets…

Nearly half of all units in North Charleston are more than 30 years old

12.1% vacancy

Lowest rents among the submarkets

Submarkets…

Summerville is the largest submarket, accounts for one-quarter of the entire supply

The majority of units in Summerville are less than 5 years old.

Vacancy rate is 11.1%

Submarkets…

West Ashley accounts for one-quarter of supply

The majority of communities in are more than 30 years old

Highest occupancy rate in region at 90.6%

Rents fell -5.4% in the last year

Regional Comparison…

Occupancy Rates

76%

78%

80%

82%

84%

86%

88%

90%

92%

94%

Ch

arl

es

ton

Ch

arl

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Co

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Gre

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vill

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Ja

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so

nv

ille

My

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Be

ac

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No

rfo

lk-

Va

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Sa

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Wilm

ing

ton

Regional Comparison…

Rent Growth

-8.0%

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

Ch

arl

es

ton

Ch

arl

ott

e

Co

lum

bia

Gre

en

vill

e-

S'B

urg

Ja

ck

so

nv

ille

My

rtle

Be

ac

h

No

rfo

lk-

Va

.Be

ac

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Sa

va

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ah

Wilm

ing

ton

Real Data

Charles Dalton(704)369-2345

Market Drivers…

Economy

Job Growth

Housing Market

Mortgage Rates

Demographics

New Development

Mortgage Rates…

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Home Prices…

$120,000

$130,000

$140,000

$150,000

$160,000

$170,000

$180,000

$190,000

$200,000

$210,000

$220,000

$230,0002

00

0

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09