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programming code itself cannot be affected by these parameter changes and users <br /> need not worry about damaging the model software. <br /> 2. Customizable Parameters: The more experienced user may wish to change entire <br /> sets of parameters such as household income, population, interest rates, or new <br /> construction. For this set of operations, entire sets of data, which combine starting <br /> levels, growth rates and growth curves are available to the user to change as needed. <br /> This procedure requires some brief training, but provides substantial latitude for <br /> developing model solutions to fit client needs. <br /> 3. Model Changes or Additions: Users with more knowledge of programming may wish <br /> to make substantial changes to the model design or add capacity or functionality to the <br /> model itself. Most users will want to contact SMS for this kind of work. For those who <br /> wish to try it themselves, unlocked versions of the model are available to Consortium <br /> members. <br /> Unlike previous models, the new Hawaii Housing Model provides a more comprehensive <br /> forecasting ability. It is possible, for instance, to use the model to estimate what the next <br /> housing price run-up will look like. Although the model is not designed to predict exactly what <br /> will happen and when, it shows a rough approximation of what supply and demand forces do to <br /> the housing market. <br /> The new model also comes with a caveat. Like all forecasting models, future projections <br /> depend heavily on the past behavior of the key data series -- the Hawaii housing market. Since <br /> the early eighties, Hawaii's housing market has witnessed three price run-ups, interspersed <br /> with adjustment periods. It is quite likely, then, that any manipulation of the model parameters <br /> may change the shape and character of the next priced run up, but will not eliminate them as <br /> features of the market trend. There are no data to suggest that a run-up will not occur in the <br /> future, or that the next run-up will not be followed by an adjustment period. <br /> Technical Specifications <br /> The Hawaii Housing Model was developed using Microsoft ExcelTM. The decision was made in <br /> 1997 by Consortium members to forego migrating to more complex modeling languages in <br /> order to assure that the model could be operated by a broad range of planners using commonly <br /> available hardware and software. Although this imposes some limitations on functionality, it <br /> seems worth the price. The model is available to all members of the Consortium and requires a <br /> standard PC with at least 2.0 gigs of RAM and about 30 Megs of storage space. Of course the <br /> user would need a reasonably recent version of Excel. <br /> The model was built up from a set of custom built user-defined functions (macros) in Excel. <br /> This allows for more complexity and options in the calculations. The specifics of the <br /> calculations will not be described here, but the calculations simulate the effects of inputs on <br /> supply and demand, prices, and affordability. The model also simulates the conditions that <br /> cause a price run-up, like the one that occurred from 2003-2006, and the effects of the run-up. <br /> Hawaii Housing Planning Study,2011: Technical Report Page 14 <br /> 0 SMS, Inc. November,2011 <br />