charleston sc market update - 2009
DESCRIPTION
Update on apartment market conditions for Charleston SCTRANSCRIPT
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
ott
e
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lum
bia
Gre
en
vill
e-
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urg
Ja
ck
so
nv
ille
My
rtle
Be
ac
h
No
rfo
lk-
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ac
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va
nn
ah
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
h
Sa
va
nn
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