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

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The preference for ownership units is not always translated into reality in the marketplace. About six percent of survey respondents who said they would be moving to an owned unit next time also said they were not sure they would be able to afford it and may continue renting. That would drop the purchase incidence to about 59 percent from the initial estimate. That would be a more reliable estimate of the actual buyer rate in the market. And if that is the case, we might expect that the growth in home ownership in Hawaii will stabilize or even drop a bit over the next few years. Buyer Preferences Once again, the majority of potential buyers (83 %) preferred single - family detached homes. Single- family units are more important to buyers in Hawaii (92 %), Kauai (86 %), and Maui Counties (89 %) than in Honolulu (79 %). The County of Hawaii, with the lowest percentage of condominium units in the State, also showed the lowest preference for condo units (5% vs. 10 %). When asked if they would accept a condominium unit if they could not find a single - family unit in their price range, half of the buyers (53 %) statewide said they would. In Hawaii County, that figure dropped to 40 percent of potential buyers. About 43 percent of potential buyers said they would be looking for a one - bedroom unit and 49 percent said they would need at least two bedrooms. The preferred number of bedrooms was a bit lower than in the past, perhaps reflecting a willingness to settle for smaller units in the face of high prices. The same was true for the preferred number of bathrooms. More than 90 percent of buyers said they would need one - and -a -half or two bathrooms. Asked what would be the smallest size unit they would accept. More than a third (39 %) of the would -be buyers said they would need 1,500 square feet or more. Thirty -eight percent said they could accept units smaller than 1,200 square feet. Renter Preferences Among those who would rent their next unit, 49 percent preferred to rent a single - family house. About 43 percent preferred an apartment or condo, and another six percent chose a townhouse. Preference for single - family homes was once again much higher on the neighbor Islands than on Oahu, and Oahu renters were more interested in townhomes. Across the State, nearly all of the potential renters were willing to take units with fewer than three bedrooms. Forty -two percent were willing to take studio apartments or cottages. One - bedroom units were acceptable to 37 percent and 20 percent said they would need at least two bedrooms. Again, these figures suggest a willingness to take smaller units than in the past. The number of bathrooms was also relatively low, with 83 percent reporting that they could accept one - and -a -half baths. About 22 percent of potential renters said they would need 1,500 or more square feet of space in their next unit. Almost double that number (38 %) said they could get along with less than 1,000 square feet of living space. Hawaii Housing Policy Study, 2006 Page 21 © SMS, Inc. February, 2007