ashley lakeside village

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Ashley Lakeside VillageCharleston Market Report, LLC

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Ashley Lakeside VillageNorth Woodmere Dr.Charleston, SC 29407

Market Trend Study

Prepared for:Acme Development

1110 Mar West Street, Suite ATiburon, CA 94920

Prepared by:

Charleston Market Report, LLCBrad Rundbaken

4 Ponce De Leon Ave.Charleston, SC 29407

June 9, 2008


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Ashley Lakeside Village is a proposed 68 unit condo development on approximately 9 acres off Ashley HallRoad is located between Ashley Grove Apartments and Montclair subdivision. The floor plans consist of two and three bedroom units with a square foot range of 1000 to 1200+ sq ft. There will be some units thathave drive under garages and views of the pond. The proposed pricing I was given before I started thisreport was a target sales price of $170-$200k. The product mix is going to be 70-30 (2bds to 3bds) with afew flats as well. The three bedrooms are going to be over 1200sf and the two bedrooms will be mid 1000-1100 square feet. The proposed pricing places the approximate Price per Square Foot (PSF) at a range of $165-$170 PSF. I have not received any information on the quality, options or costs for the interior andexterior of the condominiums.

The focus of this market study is to give the developer, Acme Development, an understanding of the currentcondominium and townhouse trends in the Tri-County, Charleston County and West Ashley area in order tomake sure Acme Development wants to move forward with the project based on current pricing, inventoryand demand in the Charleston market.

Whether it is real estate or securities I use a Top Down approach in order to identify trends. This means itis important to not only understand the overall macro trends of the Tri County area but also the specificmicro data of similar comps and the geographical location as well. The critical part of doing a Market TrendStudy is using the proper market segmentation so that the trends and data reflect the proposed condominiumsthat Acme wants to place on the market in the next 6-9 months. A critical mistake many builders, investorsand developers are currently making in this market is that they are not accurately measuring buyer demand inthe proper market segment to determine what the buyer desires or can afford. The current market conditionsare also changing rapidly and data from 6 months to a year ago can represent a different picture than what


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current market conditions actually represent. In addition to scrubbing large amounts of data from the MLSfor market segmentation purposes I also went to every major competitor in West Ashley and spoke to the onsite real estate agent in order to get important information that may not be found in the MLS.

What I found from the real estate agents, data, consistent monitoring of the local Charleston market and the

economy is that the West Ashley Condo Market is a very price driven market at this particular time. Therecent appreciation of real estate prices in the Charleston market has created many home affordability problems in Charleston. The recent increase in inflation with regards to gas and food has also recentlychanged the buyers mindset with regard to real estate purchases in Charleston and West Ashley in

particular. The location of Ashley Lakeside Village is a very important positive factor in the futuremarketing and pricing. A trend to observe closely, which is supported by many of the graphs later in thereport show a declining Price per Sq Ft (PSF) particularly when I focused on West Ashley Condos. This isobviously being caused by the current credit tightening for mortgages and increasing inventory being placedon the market by developers and resellers.

The location of Ashley Lakeside Village in West Ashley is not necessarily known as a higher end market

in most cases for houses and/or condos. The proposed location of Ashley Lakeside Village does not supporta higher end PSF in my opinion. The location is very centrally located in the Tri-County area and close todowntown. The land is very narrow with a small tree lined buffer zone between Ashley Lakeside Village andAshley Grove Apartments. There is also a large pond that buffers the other side of the development betweenAshley Lakeside Village and Montclair subdivision. A demographic study will support that the predominant

buyer in this market area is a first time homebuyer, retiree, graduate student or medical student who is priceconscience.

The comparable rentals in the West Ashley market show that Ashley Lakeside Village could generate potential rental income of $1000-$1100 for the two bedrooms and $1200 per month for the three bedrooms.


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Competitive Location Map


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Broader View


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Up Close View


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Ashley Competitive Matrix

Pricing Matrix

* Please note pricing reflects market activity within the past 6 months.** Portrait Homes is discounting the Regency floor plan by $25,000. They also represent one of the mostaggressive competitors from a pricing perspective.*** Twelve Oaks is located on Johns Island, SC.


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Standard Finish Matrix


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Stats Matrix

There is a high amount of condominium inventory right now, which explains the weakness in PSF. Another important element of the inventory to be aware of is the Under Construction and Proposed Constructioncolumns in the chart above. If the current absorption rate stays the same (2.5 Sales per Month) then therewould are an additional 672 units of proposed inventory coming on the market soon and 192 units of inventory in the pipeline and under construction. If the real estate market were to weaken further thisinventory in the pipeline could place more downside pressure on condominium prices of developers andowners who are not in a strong financial position.

Even with all the bad news in the real estate market the Absorption per Month column shows that certaincompetitors are selling between 5-6 condos or townhouses per month. These developments which includeCarolina Bay (Tidewater), The Commons at Grand Oaks and Twelve Oaks are all below $130 PSF.


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Incentive Matrix


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Property Pictures and Amenities

Arboretum

AmenitiesBeautifully landscaped grounds, walking trails, resort style clubhouse, business center, gym, spa andswimming pool.


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Ashley Park

Amenities No amenities available


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Carolina Bay (Tidewater)

Amenities Clubhouse, community, greenbelt, jogging/walking trails, park, playground, sidewalks, woods.


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Carolina Bay (Essex)

Amenities Pool and walking trails.


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Concord West Ashley

AmenitiesTwo swimming pools, movie theatre, summer kitchen, spa and tanning room, outdoor fireplaces and fire pit,Xbox 360 wireless remote game room, indoor kitchen, business center outdoor pavilions with plasma TV'sand XM radio, hot tub in covered gazebo with waterfall, conference room, clubhouse with full kitchen,tennis courts, car care facility, dog park, pocket parks and grilling stations throughout community, wetlands.


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Meeting Street Townhomes at Grand Oaks

Amenities No amenities slated for now. States 1.15 acres for "future amenity area," backs wooded area


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Mepkin Place

Amenities No amenities available.


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The Colony at Heron Reserve

AmenitiesBacks to nature preserve, swimming pool, fitness center


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The Commons at Grand Oaks

AmenitiesCommunity pool and pool house, common areas, sidewalks, ponds


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Twelve Oaks

Amenities Business center, fitness center, swimming pool and walking trails.


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Willow Oaks

Amenities No amenities available.


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Sales Price/List Price and Months Inventory for Condos in the Tri-County

$0

$50,000

$100,000

$150,000

$200,000

$250,000

J un- 0 4

S e p- 0 4

D e c- 0 4

M ar - 0

5

J un- 0

5

S e p- 0

5

D e c- 0

5

M ar - 0

6

J un- 0

6

S e p- 0

6

D e c- 0

6

M ar - 0 7

J un- 0 7

S e p- 0 7

D e c- 0 7

M ar - 0

8

Month (MLS)

L i s t P r i c e

/ S a

l e s

P r i c e

( M L S )

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

M o n

t h s

I n v e n

t o r y

Months Inventory Avg List $ Avg Sale $ Poly. (Avg Sale $)

Created by: Brad Rundbakenwww.charlestonmarketreport.com


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Sales Price/List Price and Months Inventory for Condos in Chaleston County

$0

$50,000

$100,000

$150,000

$200,000

$250,000

J un- 0 4

S e p- 0 4

D e c- 0 4

M ar - 0

5

J un- 0

5

S e p- 0

5

D e c- 0

5

M ar - 0

6

J un- 0

6

S e p- 0

6

D e c- 0

6

M ar - 0 7

J un- 0 7

S e p- 0 7

D e c- 0 7

M ar - 0

8

Month (MLS)

L i s t P r i c e

/ S a

l e s

P r i c e

( M L S )

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

M o n

t h s

I n v e n

t o r y



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Sales Price/List Price and Months Inventory for Condos in the West Ashley

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

J un- 0 4

S e p- 0 4

D e c- 0 4

M ar - 0

5

J un- 0

5

S e p- 0

5

D e c- 0

5

M ar - 0

6

J un- 0

6

S e p- 0

6

D e c- 0

6

M ar - 0 7

J un- 0 7

S e p- 0 7

D e c- 0 7

M ar - 0

8

Month (MLS)

L i s t P r i c e

/ S a

l e s

P r i c e

( M L S )

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

M o n

t h s

I n v e n

t o r y



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PSF and DOM for Condos in West Ashley

$-

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

J un- 0

3 Av

er a

g e

S e p- 0

3 Av

er a

g e

D e c- 0

3 Av

er a

g e

M ar - 0 4 Av

er a

g e

J un- 0 4 Av

er a

g e

S e p- 0 4 Av

er a

g e

D e c- 0 4 Av

er a

g e

M ar - 0

5 Av

er a

g e

J un- 0

5 Av

er a

g e

S e p- 0

5 Av

er a

g e

D e c- 0

5 Av

er a

g e

M ar - 0

6 Av

er a

g e

J un- 0

6 Av

er a

g e

S e p- 0

6 Av

er a

g e

D e c- 0

6 Av

er a

g e

M ar - 0 7 Av

er a

g e

J un- 0 7 Av

er a

g e

S e p- 0 7 Av

er a

g e

D e c- 0 7 Av

er a

g e

M ar - 0

8 Av

er a

g e

Avg Sold Date (MLS)

P S F

0

100

200

300

400

500

600

D a y s o n

M a r k e

t

DOM Poly. (Price Per Sqft)



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Sales Price/List Price and Months Inventory for Townhouses in the Tri-County

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

J un- 0 4

S e p- 0 4

D e c- 0 4

M ar - 0

5

J un- 0

5

S e p- 0

5

D e c- 0

5

M ar - 0

6

J un- 0

6

S e p- 0

6

D e c- 0

6

M ar - 0 7

J un- 0 7

S e p- 0 7

D e c- 0 7

M ar - 0

8

Month (MLS)

L i s t P r i c e

/ S a

l e s

P r i c e

( M L S )

0.0

5.0

10.0

15.0

20.0

25.0

30.0

M o n

t h s

I n v e n

t o r y




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Sales Price/List Price and Months Inventory for Townhouses in the Chas. County

$0

$50,000

$100,000

$150,000

$200,000

$250,000

J un- 0 4

S e p- 0 4

D e c- 0 4

M ar - 0

5

J un- 0

5

S e p- 0

5

D e c- 0

5

M ar - 0

6

J un- 0

6

S e p- 0

6

D e c- 0

6

M ar - 0 7

J un- 0 7

S e p- 0 7

D e c- 0 7

M ar - 0

8

Month (MLS)

L i s t P r i c e

/ S a

l e s

P r i c e

( M L S )

0.0

5.0

10.0

15.0

20.0

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30.0

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PSF and DOM for Townhouses in West Ashley

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

S e p- 0

3 A v

er a

g e

A pr - 0 4 A v

er a

g e

O c t - 0 4 A v

er a

g e

F e b - 0

5 A v

er a

g e

J ul - 0 5 A v

er a

g e

O c t - 0 5 A v

er a

g e

J an- 0

6 A v

er a

g e

A pr - 0 6 A v

er a

g e

J ul - 0 6 A v

er a

g e

O c t - 0 6 A v

er a

g e

F e b - 0 7 A v

er a

g e

M a y - 0 7 A v

er a

g e

A u g- 0 7 A v

er a

g e

N o

v - 0 7 A v

er a

g e

F e b - 0

8 A v

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g e

M a y - 0 8 A v

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g e

Avg Sold Date (MLS)

P S F ( M L S )

0

50

100

150

200

250

300

350

D a y s o n

M a r k e t

DOM LPSF SPSF Poly. (LPSF)

Created by:Brad Rundbakenwww.charlestonmarketreport.com


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Conclusion

If the decision is made to move forward with this project then pricing these units will be veryimportant. In a declining market some amenities and add-ons may not add value to the PSF and needs to be

pulled from the market using specific market analysis techniques. Other variables that will have an impact

on pricing are future interest rate trends, the economy and the health of the credit markets. It is important tounderstand that pricing and marketing can be done perfect but if there is no demand due to a further deterioration of the credit markets, a spike in interest rates or a severe recession then the entire Charlestonreal estate market will weaken and experience further price declines and higher inventory.

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