2016 Hawaii Housing Planning Study

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1 Table 14. Top Six Reasons for Not Buying a Home, 2016 1 County Hawai`i Honolulu Kauai Maui State Too Expensive 47 5% 65.8% 73.1% 66.1% 64 1% Cannot Afford Down Payment 23.0% 30.8% 12.0% 23.0% 28.0% Cannot Afford Monthly Payment 14.8% 15.4% 8.2% 9.7% 14.3% Cannot Qualify For Loan 8.6% 12.6% 4.7% 13.2% 11.9% Do Not Want To Buy, Prefer To Rent 10.2% 10.1% 6.5% 4.4% 9.2% el Other 19.6% 15.0% 21.6% 19.6% 17.6% Source: Housing Demand Survey,2016 In 2016, fewer people wanted to move away Across the State, effective demand fell in each from Hawaii. Fewer were moving because of Housing Demand Study year from 1992 (48.4%) housing issues, and fewer were not buying through 2011 (30.3%). In 2016, statewide because of a lack of confidence in Hawaii's real effective demand jumped to 42.6 percent, nearly estate markets. There were still many families reaching the level observed in the late 1990s. moving out of Hawaii because they could not The long-term trend, marked by slower market afford to buy a home, and Table 14 suggests activity, turned upward in 2015. The 20-year low 111 that a high priced market forced prospective measured in 2011 occurred during a housing homeowners into rental units. But, perhaps, the market with very high prices and low inventories. end of the Great Recession has brought at least Such market conditions do not favor buyers. The a modicum of confidence to the market. increase in effective demand that we see in 2016 occurs at a time when home prices are high and b. Effective Demand inventories are low following an 8-year period of il low market activity. The situation suggests a A household that leaves Hawaii will not increase build-up of pent-up demand. These conditions demand for Hawaii housing units. They were might be expected to result in more people being 01 excluded from current demand. The estimate of interested in moving. effective demand included only respondents who would move within the State. Movers, defined as Historically, effective demand estimates for the residents who met the criteria for inclusion in the counties have been similar over time. Honoluluil effective demand estimate, were expected to County's effective demand has generally been generate market activity (buying, selling, or both) highest among the counties. Among the in the next several years. As such, the estimate Neighbor Island counties, effective demand has j of effective demand is the number of units likely been highest in Maui County and lower in to be affected as these movers enter the market. Hawaii and Kauai Counties. Table 15. Effective Demand for Next Five Years by County, 1992, 1997, 2003, 2006, 2011, and 2016 c. Qualified Demand Effective Demand Percent of households intending to move to a Qualified demand narrows the demand estimate ii housing unit in Hawaii in the next five tears , further by considering only effective demand 1992 1997 2003 2006 2011 2016 households that are financially prepared to Hawai'i 40.2 34.3 33.8 36.3 26.0 38 7 pursue their preferred tenancy and unit type. .1 Honolulu 51.7 47.3 38 9 33 2 31.3 44 9 This step eliminates households that do not have �j Maui 38 8 41 4 35 7 39 6 31 3 38.7 the financial qualifications to purchase or rent housing units in the current economy. Kaua`i 38 5 34 2 31 4 30 6 27 3 31 2 State 48 4 44 4 37 5 34.2 30.3 42.6 Based on this analysis, we estimate that 42 Source: Housing Demand Survey, 1997,2003,2006,2011,2016 percent of effective demand households are Hawaii Housing Planning Study,2016 Page 20 I ©SMS, Inc December,2016