2011 Housing Planning Study - State of Hawaii

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HOUSING FORECASTS, 2012-2030 The focus of the HHPS is on planning — using population growth rate of 1.0 percent per annum, housing market information to develop wise household size dropping by .01 points per courses of action in housing development in the decade, household income growth rate of about next few years. Planning's future-oriented 2.6 percent per annum, and interest rates component requires more than information on beginning at 4.0 percent in 2011 and rising to past performance. We will need a forecast of 6.25 percent by 2030. how the housing market will function in the future. Modeled Demand The Hawaii Housing Model was developed to provide forecasts. Initiated in 1992, the Model Figure 11 presents demand estimates for the was expanded each time the Study was State housing market from 1980 through 2030. updated. It exists today as a supply and demand Data are shown for single-family and multi-family model of Hawaii's housing market. It treats unit sales. In years before 2011, the sales each County as an independent housing market figures were based on resales reported by that can be summed to describe housing activity boards of realtors. In the last two studies, for the entire State. For those who are estimates for new unit sales and sales prices interested, the most recent version of the Hawaii have become available. Post-2010 new unit Housing Model is further described in the counts reflect the assumptions noted above and Technical Report18. the history of the housing market since 1980. Figure 11. Housing Unit Sales, State of HOUSING DEMAND Hawaii, 1980-2030 25,000 The Hawaii Housing Model summarizes ■SF resales ■MF resales demand in terms of units sold each year19 and produces separate estimates for single-family 20,000 and multi-family units. For past years, demand u is based heavily on the unit sales reported by C 15,000 -------------- ------ county boards of realtors and subsequently D m reported by DBEDT. Sales forecasts for future s years are based on past performance of the o 10,000 ---- ------ --- housing market and several other factors =_ including population growth, household ° 5,000 formation, household income, and expected E interest rates. z _ O N O N O N O N O N O Important parameters set for the statewide m m m m o 0 0 0 0 0 0 forecasts shown here are as follows: a Source: Hawaii Housing Model, 2011 �$ HHPS, 2011 Technical Report. 9 Note: The discussion of demand in the previous section As noted earlier, the Hawaii housing market has was based on the Demand Survey where "demand" is been cyclical over the last 35 years. Very identified by housing consumers. Data from past generally, we have had three major market Demand Surveys have been incorporated in the expansions followed by periods of post- Housing Model. What appears here is the end result of supply and demand characteristics of the local housing expansion adjustment. The cyclical nature of market in terms of the total number of units sold each sales is definitely a feature of our housing market year. Hawari Housing Planning Study,2011 Page 22 0 SMS, Inc. November,2011