2015-2019 Revised Con Plan for CDBG-CV

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Needs Assessment NA-05 Overview Needs Assessment Overview The Hawaii Housing Model was developed to provide forecasts. Initiated in 1992, the Model was expanded each time the Study was updated. It exists today as a supply and demand model of Hawaii's housing market. It treats each County as an independent housing market that can be summed to describe housing activity for the entire State. For those who are interested,the most recent version of the Hawaii Housing Model is further described in the Technical Report. HOUSING DEMAND The Hawaii Housing Model summarizes demand in terms of units sold each year and produces separate estimates for single-family and multi-family units. For past years, demand is based heavily on the unit sales reported by county boards of realtors and subsequently reported by DBEDT. Sales forecasts for future years are based on past performance of the housing market and several other factors including population growth, household formation, household income,and expected interest rates. Important parameters set for the statewide forecasts shown here are as follows: a population growth rate of 1.0 percent per annum, household size dropping by.01 points per decade, household income growth rate of about 2.6 percent per annum, and interest rates beginning at 4.0 percent in 2011 and rising to 6.25 percent by 2030. Modeled Demand Data for demand estimates for the State housing market from 1980 through 2030 for single-family and multi-family unit sales indicate that in years before 2011,the sales figures were based on resales reported by boards of realtors. In the last two studies,estimates for new unit sales and sales prices have become available. Post-2010 new unit counts reflect the assumptions noted above and the history of the housing market since 1980. As noted earlier, the Hawaii housing market has been cyclical over the last 35 years. Very generally, we have had three major market expansions followed by periods of poste expansion adjustment. The cyclical nature of sales is definitely a feature of our housing market and there is no indication that the underlying factors responsible for those cycles will change significantly in the future. The model, therefore,forecasts continuation of that pattern. It produces another housing run-up beginning later in this decade. We note that the quality and quantity of housing-related data has improved notably since 1992. The model and its forecasts benefit from the improvement and reflect improvement in detail through the years. Consolidated Plan HAWAII COUNTY 19 DMB Control Nona 2506-0117(exp,06/30/2018)