2011 Housing Planning Study - State of Hawaii

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The effective demand decreased across all Housing Preferences (Buyers and counties. A decrease in demand is consistent Renters) with Hawaii's slow growth economy and soft housing market. Buyer and renter preferences for certain housing unit characteristics were measured in 2011 as in Effective demand has changed notably since the past. The objective was to provide 1992, reflecting the changing condition of information on preferences to support a broad Hawaii's housing market. Across the State, range of housing issue analysis over the next effective demand fell continuously from 48 few years. In this section of the report, we will percent in 1992 to 44 percent in 1997, then 38 briefly describe the most salient of those percent in 2003, 34 percent in 2006 and to 30 preferences. percent in 2011. In the City and County of Honolulu, effective demand fell from the highest Among all households that want to move, 42 in the State (52%) in 1992 to 31 percent in 2011. percent plan to purchase their next unit. Until Kauai County demand dropped markedly in the 2011, this figure had changed very little. This HHPS years, but not nearly as much as demand year the preference for ownership was unusually in Hawaii County. Effective demand in Hawaii low, with notable decreases across all counties. County, which was as high as 40 percent in This shift away from homeownership is more 1992, is now the lowest among the Counties at likely a reaction to the current economic climate, 26 percent. In Maui County, effective demand difficulties obtaining financing, and probable dropped from 1992 through 2003, rebounded delays for homeowners who must sell their between 2003 and 2006, and fell again to 31 current units to purchase a new home, rather percent in 2011. than a genuine change in the preference for owning a home. There is little doubt that housing prices have affected demand estimates. Nearly 30 percent The preference for ownership units is not always of all those who expect to be moving out of translated into reality in the marketplace. About Hawaii mentioned housing prices as their main 14 percent of survey respondents statewide who reason for leaving. That is up from 12 percent in said they would choose to move to an owned 1997, 19 percent in 2003 and 26 percent in unit next time also said they were not sure they 2006. Two-thirds of those who said they would would be able to afford it and may continue not be buying a home on their next move said renting. That would be a more reliable estimate that housing costs were one of the major of the actual buyer rate in the market. If that is reasons for that decision. the case, we might expect that the growth in home ownership in Hawaii will stabilize or even Table 9. Effective Demand by County, 1992, 1997, drop a bit over the next few years. 2003, 2006 and 2011 City & County County County County State Buyer Preferences of of of of of Honolulu Maui Hawaii Kauai Hawaii Once again, the majority of potential buyers 1992 51.7% 38.8% 40.2% 38.5% 48.4% statewide (68%) preferred single-family detached 1997 47.3% 41.4% 34.3% 34.2% 44.4% 2003 38.9% 35.7% 33.8% 31.4% 37.5% homes. Single-family units are more important 2006 33.2% 39.6% 36.3% 30.6% 34.2% to buyers in Hawaii (87%), Maui (83%), and 2011 31.3% 31.3% 26.0% 27.3% 30.3% Kauai Counties (82%) than in Honolulu (61%). Source: Housing Demand Survey, 1992, 1997, 2003, 2006, The County of Hawaii, with the lowest and 2011 percentage of condominium units in the State, also showed the lowest preference for condo units (6%). Hawaii Housing Planning Study,2011 Page 14 ©SMS, Inc. November,2011