2006 Housing Policy Study by SMS Research & Marketing Services, Inc.

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HOUSING DEMAND This section deals with a unique measure of housing demand. It measures demand as interest in moving to a new housing unit, whether to buy or to rent. It considers interest in moving at any time in the relatively near future 13. The inverse of this measure (one minus the percent who want to move) is the percentage of households who told us that they were in the housing unit where they wanted to live and had no intention of moving in the foreseeable future. This measure of demand should not be confused with other less comprehensive measures of demand used elsewhere. It should not be confused with the number of housing units that should be built in Hawaii. Many, if not most, of the units shown at the bottom of Table 9 will be supplied from current inventory. Our measure of demand suggests the level of real estate activity that can be expected in the relatively near future. Table 9 shows that about 40 percent of all Hawaii households are interested in moving to a new unit. Interest is somewhat higher in Hawaii and Maui Counties. Price increases have been higher in those two counties and while more units have been added to the inventory than in other counties (see table 32), the rate of out -of -state ownership has also been much higher (see Table 5). This suggests that pent -up demand may be higher in these two counties than in Honolulu or Kauai Counties. Table 9. Interest in Moving to a New Home by County, 2006 "Will move out of state" measured as first choice out of state. Effective demand eliminates those moving out of state from the overall demand estimate. Percent is percent of all movers. "Estimated number of movers" is the number of households wishing to move to a new unit minus those who will move to units outside of Hawaii. Just less than 20 percent of all those who want to move expressed a desire to move to a new home outside of Hawaii. As usual, there were more residents planning to move out from Honolulu than from other counties. We were surprised to see Kauai County's figure at 21 percent this year, much higher than the 13 percent for Maui and Hawaii Counties. If we subtract those who want to leave Hawaii from those who want to move, we get an estimate of effective demand that is comparable across time and measures of pressure on the housing market over the next several years. Across the state, effective demand is expected to be equal to about 33 percent of all 2006 households. The difference between Hawaii and Maui Counties (40 %) on one hand, and Honolulu and Kauai Counties on the other (30 %) is even greater by this measure. 13 Data were taken from the Housing Demand Survey. All respondents were asked if and when they intended to move to their next housing unit. Hawaii Housing Policy Study, 2006 Page 19 © SMS, Inc. February, 2007 State of Hawaii County of Honolulu County of Hawaii County of Maui County of Kauai Want to move to a new home 39.8 38.8 42.1 45.1 35.6 Will move out -of -state 19.7 22.5 12.7 13.2 20.6 Effective demand for homes 32.6 30.9 37.2 39.6 29.0 Estimated number of movers 142,362 93,528 22,796 19,577 6,362 "Will move out of state" measured as first choice out of state. Effective demand eliminates those moving out of state from the overall demand estimate. Percent is percent of all movers. "Estimated number of movers" is the number of households wishing to move to a new unit minus those who will move to units outside of Hawaii. Just less than 20 percent of all those who want to move expressed a desire to move to a new home outside of Hawaii. As usual, there were more residents planning to move out from Honolulu than from other counties. We were surprised to see Kauai County's figure at 21 percent this year, much higher than the 13 percent for Maui and Hawaii Counties. If we subtract those who want to leave Hawaii from those who want to move, we get an estimate of effective demand that is comparable across time and measures of pressure on the housing market over the next several years. Across the state, effective demand is expected to be equal to about 33 percent of all 2006 households. The difference between Hawaii and Maui Counties (40 %) on one hand, and Honolulu and Kauai Counties on the other (30 %) is even greater by this measure. 13 Data were taken from the Housing Demand Survey. All respondents were asked if and when they intended to move to their next housing unit. Hawaii Housing Policy Study, 2006 Page 19 © SMS, Inc. February, 2007