COMPREHENSIVE HOUSING MARKET ANALYSIS Honolulu, Hawaii

U.S. Department of Housing and Urban Development Office of Policy Development and Research As of October 1, 2014

Honolulu Housing Market Area Moloka'i The Honolulu Housing Market Area (HMA), comprising Honolulu County in Hawaii, is coter-­ Lanai minous with the Urban Honolulu, HI Metropolitan Maui Pacific Ocean Statistical Area. The military, agriculture, health care, trade, and tourism provide a strong economic base for the HMA.

Summary

Economy Sales Market struction of rental units and the conversion of single-family homes, Economic conditions have strength­- Sales housing market conditions townhomes, and condominiums to ened in the Honolulu HMA since in the HMA are tight, with a 0.8- rental units. During the forecast 2011. Nonfarm payrolls increased percent vacancy rate, down from period, demand in the HMA is by 4,800 jobs, or 1.1 percent, to 1.1 percent in 2010. During the expected for 2,675 new market-rate 459,100 jobs during the 12 months next 3 years, demand is expected rental units. ending September 2014, with the for 4,375 new homes (Table 1). most significant growth occurring The 550 homes under con­struction Table 1. Housing Demand in the in education and health services, and a portion of the 16,300 other Honolulu HMA During the leisure and hospitality, and govern- vacant units that may reenter the Forecast Period ment sectors. Nonfarm payrolls are market will satisfy some of the Honolulu HMA expected to grow an average of 1.2 forecast demand. Sales Rental percent a year during the 3-year Units Units forecast period. Rental Market Total demand 4,375 2,675 Under Rental housing market conditions construction 550 0 in the HMA are currently balanced, Notes: Total demand represents estimated production necessary to achieve a balanced with a 5.0-percent rental vacancy market at the end of the forecast period. rate. Growth in renter households Units under construction as of October 1, 2014. A portion of the estimated 16,300 since 2010 has out­-paced the con­- other vacant units in the HMA will likely Market Details satisfy some of the forecast demand. The forecast period is October 1, 2014, to Economic Conditions...... 2 ­October 1, 2017. Population and Households...... 5 Source: Estimates by analyst Housing Market Trends...... 6 Data Profile...... 10 Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 2 Economic Conditions national economictrends. Although the HMAdoesnotalways follow the visitors traveling byplane. Tourism in the of comprise agrowing proportion mies improve, visitors international the other49states. AsAsianecono visitors traveling byplanecomefrom pensive in1961.Most airfaresstarting becoming astatein1959andlessex crease intourismresultedfromHawaii the HMAfollowed bydefense. Thein­ economicfactorin most important Since 1961,tourismhasbecomethe followed andtourism. by agriculture economic factorintheHonoluluHMA A The analyst estimatedthattheHMA’s more than$12 billion (in2009dollars). Hawaii was expenditure inthestateof military indirect economicimpactof in 2011concludedthatthedirect and since 2009.ARandstudy published percent increaseincivilian personnel intheHMA, anestimated21- itary than 23,000civilians work forthemil­ active-duty personnelin2009.More of 5-percent increasefromthenumber sonnel arestationedintheHMA,a More than50,000active-duty per­ field Barracks/Fort Shafter, Hawaii. BaseHawaii;Marine Corps andScho­ are Joint BasePearl Harbor-Hickam; role. Thelargest basesintheHMA continues toplaymilitary animportant intheHMA, industry important Although tourismhasbecomethemost the sametimeperiods. declined from7.06to6.84days during stay forvisitors 2014. Thelengthof from January 2014throughAugust through August 2013,to $4.79billion from $4.94billionJanuary 2013 ing byplane)intheHMAdeclined visitor expenditure (bytouristsarriv ­ improving nationaleconomy, total several economicindicatorsshow an 1961, defense was the primary 1961, defensewas theprimary fter World War IIandbefore -

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latest dataavailable) was estimatedat campuses intheHMA2012(the Total directlocalspendingbyallthe with approximately 20,000students. Hawaiithe University atMãnoa, of 45,900 in2013.Thelargest campusis approximately a totalenrollmentof universities. Thesixcampuseshad community colleges tofullresearch campuses intheHMA,rangingfrom HawaiiUniversity systemhassix of Also inthegovernment sector, the level.at thecurrent civilian personnelisexpected toremain bothactive-duty and the number of $11 billion.Duringthenext 3years, thisexpenditure was about of portion next 3years. remain atfewer than2,000duringthe workers agricultural isexpected to of workers.ues toreplace Thenumber contin than 2,000becausemachinery workers remainsatfewer number of fewer than2,000in2007;thecurrent workers agricultural declinedto of in both2007and2012.Thenumber thesales crops, accountedformostof andgreenhouse including nursery crease intotalmarketvalue. Crops, thein­ of prices accountedforpart Risingcrop Agriculture). ment of despite 32fewer (U.S. farms Depart able), upfrom$126millionin2007, million in2012(thelatestdataavail­ $161 sold atatotalmarketvalue of productsfromtheHMA Agricultural next 3years. stay ataboutthesamelevel forthe the HMA.Enrollmentisexpected to thestudentscomefrom 80 percentof and generated 24,000jobs. Morethan $920 millioninemployee earnings, resulted in$3.0billionbusinesssales, Hawaii). Theselocalexpenditures of search OrganizationattheUniversity more than$1.5billion(EconomicRe -

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 3 Table 2. Source: U.S.Bureau ofLabor Statistics Note: Basedon12-month averagesthrough September2014. Figure 1. Source: U.S.BureauofLaborStatistics through September2013and2014. Notes: Numbers maynot addtototalsbecauseofrounding. Basedon12-monthaverages Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Manufacturing Mining, logging,&construction Government Other services Leisure &hospitality Education &healthservices Professional &businessservices Financial activities Information Transportation &utilities Wholesale &retail trade Economic Conditions Leisure &hospitality14.7% Other services4.6% 12-Month Average NonfarmPayroll Jobsinthe Education &healthservices 13.7% by Sector

Current NonfarmPayroll Jobsinthe Government 21.6% Government

Continued September 420,600 454,300 97,900 20,700 65,800 61,800 63,700 20,400 21,200 62,100 10,800 22,800 33,700 2013 12 MonthsEnding 7,200 Mining, logging,&construction4.9% sional andbusinessservices, and ment, leisureandhospitality, profes the HonoluluHMAincludegovern payrollThe mainnonfarm sectorsin payrollsfarm averaged 452,100 a year. sion ended.In2012and2013,non in 2012and2013whenthelocalreces­ economy. payrolls Nonfarm improved the local national recession influenced an average 437,100ayear whenthe payrolls2011, nonfarm declinedto 446,500 ayear. From 2009through payrolls2008 whennonfarm averaged economy improved from2004through payrolls averaged 414,300 ayear. The From 2000through2003,nonfarm Manufacturing 2.4% Professional &businessservices14.0% September Wholesale &retail trade13.3% 425,200 459,100 Honolulu HMA 99,000 21,200 67,300 62,700 64,100 20,800 21,800 61,200 11,200 22,700 33,900 2014 Financial activities4.5% 7,100 Information 1.5% Transportation &utilities4.8% Absolute Change Honolulu 1,100 1,500 4,600 4,800 – 100 – 900 – 100 500 900 400 400 600 400 200 , bySector Change Percent

– 1.4 – 1.4 – 0.4 HMA, 1.1 2.4 2.3 1.5 0.6 2.0 2.8 1.1 3.7 0.6 1.1 - - - -

1,100 jobs, or1.1percent,to99,000 The government sectorincreasedby reason forthegrowth inthissector. and restaurantworkers, was themain jobs relatedtotourism,includinghotel thetotalincreaseinjobs. Hiringin of to 67,300,andaccountedfor31percent increased by1,500jobs, or2.3percent, jobs was leisureandhospitality, which period, thesectorthataddedmost 459,100 jobs(Table 2).Duringthis from theprevious 12months, tonearly increased by4,800jobs, or1.1percent, payrollsstrengthened whennonfarm employment conditionsintheHMA 2014, the 12monthsendingSeptember education andhealthservices. During 660 jobs, or1.3percent, compared 2014,thissubsectoradded September payrolls. Duringthe12monthsend­ thetotalnetincreaseinnonfarm of a year andaccountedfor24percent 860 jobs,an average or2.0percent, of cial assistancesubsectorincreasedby employment inthehealthcareandso­ assistance subsector. Duringthistime, inthehealthcareandsocial occurring thatgrowth (Figure 2),withmostof sector hasincreased30percent services Since 2000,theeducationandhealth 1.4percent. decrease of trade sector, with900joblosses, ora the declineinwholesaleandretail 2014wasSeptember partly offsetby sector duringthe12monthsending payroll growth inthegovernment government payroll growth. Nonfarm was thereasonforstate services ing instategovernment educational 2014.Hir months endingSeptember the government sectorduringthe12 sector accountedforallthegainin (Figure 1).Thestategovernment sub ­ sector isthelargest sectorintheHMA payroll­nonfarm jobs, thegovernment total ing formorethan21percentof during thissameperiod.Account­ -

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 4 Source: Moody’s economy.com Note: Excludeslocal schooldistricts. Table 3. Kaiser Permanente Hawaiian Airlines,Inc. Hilton Hotels&Resorts Starwood HotelsandResorts Hawaii PacificHealth The Queen’s MedicalCenter University ofHawaiisystem Marine CorpsBaseHawaii Joint BasePearlHarbor Schofield Barracks/FortShafter Source: U.S.Bureau ofLabor Statistics Note: Current isbasedon12-monthaverages through September 2014. Figure 2. Economic Conditions – 40 Name ofEmployer

Major Employersinthe SectorGrowthinthe ® – 30 – 20 –

Continued Honolulu Education &healthservices Transportation &utilities Leisure &hospitality Leisure &hospitality Education &healthservices Government Government Government Government Government Nonfarm Payroll Sector – 10 Honolulu HMA 22,750 jobs, down about100jobs, 2014 averagedending September sector payrolls duringthe12months The mining, logging, andconstruction during thenext 3years. growth isexpected inthissubsector employees (Table 3).Additional Queen’s MedicalCenter, with 5,275 employer inthissubsectorisThe theHMAworkforce. Thelargest of em­ and socialassistancesubsector previous 12months. Thehealthcare jobsduringthe with thenumber of ploys approximately 11percent HMA 0 , PercentageChange,2000toCurrent 10 Employees Number of 11,850 33,400 69,850 4,575 4,900 5,400 5,500 5,800 5,275 8,325 20

was 2.4percentin2006but peaked 12 months. Theunemployment rate from 4.4percentduringtheprevious 2014, 12 monthsendingSeptember 4.1percentduringthe to anaverage of average unemployment ratedeclined conditions improved intheHMA, recent recession.Whileeconomic much asthenationduringmost The localeconomy didnotdeclineas phase willopenin2017. tion periodthatendsin2019.Thefirst beforetheconstruc fessional services engineering, andpro­ in construction, which willgenerate 10,000directjobs project, currently underconstruction, $5.2 billionHonoluluRailTransit the payrolls willimprove becauseof 3 years, nonresidentialconstruction national recession.Duringthenext in 2007beforedecliningduringthe ment inthissectorpeakedat26,500 less thantheprevious peak. Employ joblevels construction land haskept developable month period.Thelackof or 0.4percent,fromtheprevious 12- 30 Total nonfarmpayroll jobs Service-providing sectors Goods-producing sectors Education &healthservices Professional &businessservices Financial activities Transportation &utilities Manufacturing Government Other services Leisure &hospitality Wholesale &retail trade Mining, logging,&construction Information -

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 5 Source: U.S.BureauofLaborStatistics Figure 3.

Labor force and

resident employment Economic Conditions Population andHouseholds 370,000 390,000 410,000 430,000 450,000 470,000 490,000 ployment Rateinthe Trends inLaborForce,ResidentEmployment,andUnem Labor force

2000

2001

2002

2003

Continued 2004 Resident employment

2005 Honolulu HMA,

2006 migration averagedmigration 4,025people a averaged 6,850peopleayear. Netin- From 2003to2006,netnaturalchange minusdent births residentdeaths). attributed tonetnaturalchange (resi­ thegrowth intheHMAwas cent of or 1.2percent,ayear. Nearly 63per­ 10,900, increased byanaverage of During thisperiod,thepopulation 2000 was strongest from2003to2006. Population growth intheHMAsince 1,325 peopleayear from2000to2003. averagedestimates). Out-migration decennial censuscountsandJuly 1 or 0.7percent,ayear (CensusBureau aged only approximately 6,050people, 2000 to2003,populationgrowth aver ­ October2014.From at 994,100asof theHMAwas estimated population of Hawaii. The thestateof population of T spending helpedtomoderatethe Increased stateandlocalgovernment 9.3-percent rateforthenationin2009. it was stillsignificantly lessthanthe rate morethandoubledintheHMA, at 5.8percentin2009.Althoughthe 2007

2008 for nearly 70 percent of the total thetotal for nearly 70percentof he HonoluluHMAaccounts

2009 2000Through2013

2010

2011 Unemployment rate 2012

2013 10.0 0.0 2.0 4.0 6.0 8.0 -

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assistance subsector. sector andinthehealthcaresocial to occurintheleisureandhospitality with thelargest additionsexpected by 5,500jobs, or1.2percent,ayear, payrollsfarm areexpected toincrease During the3-year forecastperiod,non­ HMA from2000through2013. the average unemployment rateinthe labor force, residentemployment, and tion). Figure3shows trendsinthe and Hawaii (TheBrookingsInstitu therecessioninHMA effects of 0.9 percent, a year. The population of 0.9 percent,ayear. Thepopulation of increase, averaging 8,975 people, or growth intheHMAisexpected to During thenext 3years, population improved. immigration international year whenthelocaleconomy andnet averagedin-migration 3,250peoplea Duringthisperiod,net migration. highernetin- to 6,150becauseof despite a declineinnetnaturalchange 9,300peopleayearto anaverage of population growth increasedagain people ayear. From 2010to2013, declinedto500 net in-immigration increased to7,300peopleayear, and ing thisperiod,netnaturalchange Dur­ adeclineinnetin-migration. of people, or0.8percent,ayear, because population growth declinedto7,000 economies grew. From 2006to2010, year whenboththelocalandnational

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 6 estimates byanalyst Sources: 2000and2010—2000Census2010Census;current forecast— Notes: ThecurrentdateisOctober1,2014.forecast October1,2017. Figure 5. Population andHouseholds estimates byanalyst Sources: 2000and2010—2000Census2010Census;currentforecast— 2017. is October 1, The forecast date 2014. is October1, Notes: Thecurrentdate Figure 4.

Housing Market TrendsHousing Average annual change Average annual change 10,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 0 0

HMA, Components ofPopulationChangeinthe Population and HouseholdGrowthinthe 2000 toForecast 2000 to2010 2000 to2010 2000toForecast Net naturalchange

Population Continued HMA, andFigure5shows thecom­ lation andhouseholdgrowth inthe forecast period.Figure4shows popu­ the3-year 1.02 millionbytheendof the HMAisexpected toreachnearly local economies and the lack of local economies andthelackof response tothe improved national and Honolulu HMAiscurrently tightin The saleshousingmarketinthe Sales Market 2010 tocurrent 2010 tocurrent Households Net migration Current toforecast Current toforecast Honolulu HMA, Honolulu -

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the result of the doubling up by renters thedoublingupbyrenters the resultof rate. Thehouseholdsizeincreasewas households fromgrowing atafaster thenumberOctober 2014,kept of people in2010to3.02people, asof increase inhouseholdsizefrom2.95 311,047 householdsin2010.The was estimatedat316,900,upfrom householdsintheHMA the number of October1,2014, ing the2000s. Asof households, or0.8percent,ayear dur­ 2,450 from theaverage increaseof or 0.4percent,ayear since2010,down Honolulu HMAhasincreasedby1,300, householdsinthe The number of HMA, from2000totheforecastdate. populationchange inthe ponents of on the properly zonedresidential land development has already takenplace Vacant landisexpensivement. because available landforresidentialdevelop date.current in theHMAfrom2000through forhousehold growth by tenure report this See Table DP-1attheendof theforecastperiod. HMA bytheendof to resultin321,300householdsthe period. Householdgrowth isexpected duringtheforecast in netin-migration anincrease period,becauseof current annual increaseduringthe2010-to- year, slightly morethantheaverage 1,475 households, or0.5percent,a expected toincreasebyanaverage of householdsintheHMAis number of During the3-year forecastperiod,the housing pricesmoreaffordable. and owners tomaketherentsand - -

Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 7 Sales Market Market TrendsHousing analyst Sources: 2000and 2010—2000Censusand2010Census; current—estimatesby Note: ThecurrentdateisOctober 1,2014. Figure 6. 100,000 120,000 140,000 160,000 180,000 20,000 40,000 60,000 80,000 0

2000 toCurrent Number ofHouseholdsbyTenureinthe Continued 2000 Renter decrease in the number of single-family decrease inthenumber of at historically low interestrates. The abled householdstopurchasehomes proved economicconditionsthaten­ im­ rate since2010was theresultof Thedeclineinthevacancy the report). cent in2010(Table DP-1attheendof rate is0.8percent,down from1.1per­ estimatedownerThe current vacancy the otherstatesorforeigncountries. and fixtureshave tobeshippedinfrom rial costs, becauselumber, appliances, building intheHMAishighermate vation. Alsoaddingtothecostof orconser­ is zonedeitheragricultural land intheHMA—about93percent— theremainingvacant and mostof for condominiums in September for condominiumsinSeptember for single-family homesand20days these figureswere upfrom18days 23 days forcondominiums. Bothof 19 days forsingle-family homesand 2014, thedays onmarketaveraged on themarketlonger. InSeptember dards have resultedinhomesstaying prices andstringent stan mortgage in thevacancy rate. Theincreasing to mid-2000salsoledthedecline the num­ comparedwith being constructed homes andcondominiumscurrently 2010 ber builtintheearly 2000s Owner Honolulu HMA, Current -

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the previous 12-month period. The homessoldduring with thenumber of 14 percent, or 1,750 homes, compared home salestotaled10,300homes, down 2014, 12 monthsendingSeptember market iscurrently tight,duringthe Wood Company).Althoughthesales through 2007(Metrostudy, AHanley 22,450 homessoldeachyear from2005 or 11,450homes, fromtheaverage of 2008 through2011,down 51percent, condominiums soldeachyear from single-family homes, townhomes, and 11,000new andexisting An average of since 2000. households bytenure intheHMA 2013. Figure6shows thenumber of in HMAwhen comparedwithother a large effect onthehomesalesprices sold from2008to2011didnot have homes The declineinthenumber of $459,600from2005through2007. of the average annual homesalesprice home salespriceisup30percentfrom averagethrough 2011.Thecurrent $488,400from2008 sales priceof 22 percentfromtheaverage annual $596,900, fromtheprevious year and sales priceincreased7percent,to 2014,theaverageing September home are rising. Duringthe12monthsend­ Although salesaredown, homeprices 2005 through2007. annual existing homesalesfrom of mains higherthantheaverage 2percent themarketre­ but theREOshareof during theprevious 12-monthperiod, sales was reducedto4from5percent that were realestateowned (REO) existing homesales the percentage of 2014, 12 monthsendingSeptember in thedeclinehomesales. Duringthe stringent standardsresulted mortgage with theincreasesinhomeprices, and prices, up incomegrowth notkeeping highandrisinghomesales current -

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 8 Sources: U.S.Census Bureau,BuildingPermitsSurvey; estimatesbyanalyst Notes: Includestownhomes. Currentincludesdata throughSeptember2014. Figure 7. 1,500 2,000 2,500 3,000 1,000 500 Sales Market Market TrendsHousing 0

Single-Family HomesPermittedinthe 2000 2000 toCurrent

2001 Continued

2002

2003

2004

2005

2006 A HanleyWood Company).During HMA sincethemid-2000s(Metrostudy, allhomesalesinthe 69 percentof sales have approximately represented land,condominium the highcostof thelimitedavailability and Because of 47 percentinMay 2013(Trulia.com). households. Thisfigureisdown from were affordabletomiddle-income for saleonTrulia.com inMay 2014 thehomeslisted Only 39percentof the peakyear beforetherecession. $490,600in2007, home salespriceof theaveragewas within5percentof average homesalespriceintheHMA Every year duringthisperiod,the large metropolitan areas in the nation. home loans and REO properties in home loansandREOproperties seriously delinquent The percentage of opment hasbeencondominiums. allmultifamily devel­ than 44percentof ment intheHMA.Since2008,less allmultifamily develop 58 percentof accounted forapproximatelystruction through 2008,condominiumcon­ conditions were stronger. From 2000 2005 through2007,whensalesmarket average annual 16,200unitssoldfrom are currently 62percentlessthanthe to $426,500.Condominiumsales condominiumsincreased4percent, of the previous 12months, whiletheprice down 1,625units, or21percent,from condominium salestotaled6,175units, 2014, the 12monthsendingSeptember

2007

2008

2009 Honolulu HMA,

2010

2011

2012

2013

2014 -

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number 2013. inSeptember or 23percent,comparedwiththe 850, 2014,adecreaseof September wasand REOproperties 2,775in seriously delinquentloans number of 4.7-percent rateforthenation.The Hawaii, butitisslightly morethanthe is lessthanthe6.0-percentratefor Inc.). ratefortheHMA Thecurrent 2013 (BlackKnightFinancialServices, down from5.6percentinSeptember sure, ortransitionedintoREOstatus, more days delinquent,were inforeclo­ home loansintheHMAwere 90or 2014,4.8percentof September As of Hawaii. of percentage inotherparts the HMAislow compared withthe Olino atMahana. $335,000 foratwo-bedroom unitat at condominiums intheHMAstart $650,000. New homesalespricesfor custom-built homeismorethan athree-bedroom priceof starting new homesarecustombuilt.The of In theHMAmorethan35percent Makalaesubdivision. the SeaCountry $468,000 forathree-bedroomhomein family at homeintheHMAstarts anew single- The homesalespriceof date.2000 tothecurrent single-family from homespermitted data). Figure7shows thenumber of same periodayear earlier(preliminary duringthe 1,150 homespermitted homes were lessthanthe permitted, 2014,900 months endingSeptember 2003 through2006.Duringthe12 2,150 homesayear from permitted approximatelyfrom anaverage of were ayear, permitted down 45percent 970homes through 2013,anaverage of thedecreaseinsales. From 2007 of mitted, remainsatlow levels because single-family homesper­ number of building activity, asmeasuredbythe Despite increasedsalesprices, home­

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 9 Sources: 2000and 2010—2000Censusand2010Census; current—estimatesbyanalyst Note: ThecurrentdateisOctober 1,2014. Figure 8. 10.0 Sales Market Market TrendsHousing Table 4. Source: Estimatesbyanalyst demand. ed 16,300othervacantunitsintheHMA willlikelysatisfysomeoftheforecast Notes: The550homescurrentlyunderconstructionandaportionoftheestimat 6.0 8.0 0.0 2.0 4.0

Rental VacancyRatesinthe 780,000 690,000 600,000 530,000 460,000 350,000 335,000 The forecastperiod isOctober 1,2014,toOctober 1,2017. From

Estimated DemandforNewMarket-RateSalesHousing in theHonoluluHMA Price Range($) Continued 2000 8.6 and higher 779,999 689,999 599,999 529,999 459,999 349,999 To During theForecast Period the rateforapartments. Approximately overall rentalvacancy ratehigherthan compete withapartments, makingthe Inc.). Single-family homesforrent 2 percent,from$1,375to$1,400(Reis, 2013,andmarketrentsincreased of 2.7 percentduringthethirdquarter averaged 1.4percentcomparedwith vacancy 2014,theapartment rate of the HMA.Duringthirdquarter marketistightthroughout apartment salesunitsintorentalunits. The of andtheconversion rentalproperties of hold growth exceeded thedevelopment 2010 (Figure8),becauserenterhouse­ 5.0 percent,down from5.9percentin vacancy rateiscurrently estimatedat is currently balanced.Theoverall rental The rentalhousingmarketintheHMA Rental Market Honolulu HMA, 2010 5.9 Demand Units of 1,200 700 570 440 620 570 310 2000toCurrent Percent of Total Current 16.0 13.0 10.0 14.0 27.0 13.0 5.0 7.0

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price range (Table 4). priced inthe$460,000-to-$529,999 is expected forhomes tobegreatest thedemand. Demand of a portion tothesalesmarketandsatisfy return other vacant unitsintheHMAmay theestimated16,300 dition, someof demandduringthefirstyear. Inad of willmeetaportion under construction cast period.The550homescurrently to beeven throughoutthe3-year fore­ HMA (Table 1).Demandisexpected estimated for4,375new homesinthe During thenext 3years, demandis number from2003through permitted it was stillsignificantly lessthanthe an increasefrom2008and2009, but 1,050unitsayear,to anaverage of multifamily increased unitspermitted 2010 through2013,thenumber of to 420ayear in2008and2009.From multifamily declining unitspermitted resulted intheaverage number of 2007. Thenationalhousingdownturn 1,725 unitsayear from2003through mit activity increasedtoanaverage of economy improved, multifamily per from 2000through2002.Asthenational averagedpermitted, 520unitsayear multifamily units by thenumber of development,property asmeasured orconservation.Multifamily agriculture thevacant landiszonedfor Most of ment unitsandsingle-family homes. ­ apart of hinders boththeconstruction available residentialland the lackof built intheHMA.Thehighcostand havemarket-rate apartments been From date, 2010tothecurrent no 2013 AmericanCommunity Survey). the HMAwere (1-year rentalproperties single-family homesin 23 percentof

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Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 10 Sources: U.S.CensusBureau,BuildingPermitsSurvey;estimatesbyanalyst Notes: Excludestownhomes.CurrentincludesdatathroughSeptember2014. Figure 9. Table 5. Source: Estimatesbyanalyst Notes: Numbersmaynotaddtototalsbecauseofrounding.TheforecastperiodisOctober1,2014,2017. 1,000 1,500 2,000 2,500 500 Rental Market Market TrendsHousing Total 2,200 ormore 2,000 to2,199 1,800 to1,999 1,600 to1,799 Monthly Gross 0 Data Profile Rent ($) Zero Bedrooms

Estimated DemandforNewMarket-RateRentalHousingintheHonoluluHMA Forecast Period Sources: U.S.CensusBureau; U.S.Department ofHousing andUrbanDevelopment; estimates byanalyst October 1,2014. and the12months throughSeptember2014.Median FamilyIncomesarefor1999, 2009,and2013.Thecurrentdate is Notes: Numbers may notaddtototalsbecauseof rounding.Employmentdatarepresent annualaveragesfor2000, 2010, Table DP-1. Multifamily UnitsPermittedinthe 2000 Current Median FamilyIncome Rental vacancyrate Owner vacancyrate Total housing units Percent renter Renter households Percent owner Owner households Total households Total population Nonfarm payroll jobs Unemployment rate Total resident employment

2001 Continued

2002 Demand Units of 210

20 55 65 75 2003 Honolulu HMA

2004 Total 2,500 ormore 2,300 to2,499 2,100 to2,299 1,900 to2,099 Monthly Gross 2005 Rent ($)

One Bedroom 2006 from the 1,700 units permitted inthe from the1,700unitspermitted were asignificantdecline permitted, 2014,410multifamilySeptember units 2007. Duringthe12monthsending DataProfile, 2000toCurrent 2007 $60,118 315,988 130,160 156,290 286,450 876,156 411,900 416,427 45.4% 54.6% 2000

8.6% 1.6% 3.9% 2008 Honolulu HMA, Demand Units of 2009 940 230 280 330 95

2010

$78,956 336,899 136,660 174,387 311,047 953,207 434,400 428,111 2011 43.9% 56.1% 2010 Total 3,200 ormore 3,000 to3,199 2,800 to2,999 2,600 to2,799 Monthly Gross 5.9% 1.1% 5.7%

Rent ($) 2012 2000to Two Bedrooms

2013

2014 $85,608 341,900 138,600 178,300 316,900 994,100 459,100 445,500 Current

43.7% 56.3% 5.0% 0.8% 4.1%

Demand Units of 1,250 130 310 380 440 number of bedrooms. number of rate rentalhousingbyrentlevel and estimated demandfornew market- Tableunder construction. 5shows No market-rateunitsarecurrently even throughouttheforecast period. (Table 1).Demandisexpected tobe market-rate rentalunitsintheHMA demand isestimatedfor2,675new During the3-year forecastperiod, Housing andUrbanDevelopment). planning offices;U.S. of Department Richard Ellis;CensusBureau;local previous 12months(Figure9;CB 2000 to2010 Average AnnualChange(%) Three orMore Bedrooms Total 3,600 ormore 3,400 to3,599 3,200 to3,399 3,000 to3,199 Monthly Gross 2.8 0.6 0.5 1.1 0.8 0.8 0.5 0.3 Rent ($) During the 2010 toCurrent

Demand Units of 2.0 0.3 0.3 0.5 0.4 0.9 1.5 1.1 270 25 70 80 90 Honolulu, HI • COMPREHENSIVE HOUSING MARKET ANALYSIS 11 As aresult,theanalyst, through diligent fieldwork, intheresidential buildingpermits.not reflected are some unitsclassifiedascommercialstructures For buildingpermit. example, a differenttypeof orareissued or createdwithoutabuildingpermit occurs inanHMA.Someunitsareconstructed sarily allresidentialbuildingactivity that reflect Building Permits: donotneces­ Buildingpermits Census Bureau. specifiedas“other”vacantthe category bythe workers;or occasionaluse;usedbymigrant and but notoccupied;heldforseasonal,recreational, thereforeincludes unitsrentedorsold The term units thatarenotavailable forsaleorrent. analysis, othervacant unitsincludeallvacant Housing andUrbanDevelopment’s (HUD’s) Other Vacant Units:IntheU.S. of Department the development pipeline. orunitsin for unitscurrently underconstruction excess vacancies. Theestimatesdonotaccount theanalysis, growth, losses, and dateof the as-of the3-year forecastperiodgiven conditionson of needed toachieve abalancedmarketattheend thetotalhousingproduction the estimatesof buildingactivity.are notaforecastof Theyare Demand: Thedemandestimatesintheanalysis 28,2013. the OMBBulletindatedFebruary Management andBudget (OMB)in the Officeof isbasedon thedelineationsestablishedby report The metropolitanstatisticalareadefinitioninthis Forecast period:10/1/2014–10/1/2017— date:10/1/2014—Analyst’sCurrent estimates 2010: 4/1/2010—U.S. Decennial Census 2000: 4/1/2000—U.S. Decennial Census Data DefinitionsandSources Analyst’s estimates www.huduser.org/portal/ushmc/chma_archive.html For onothermarketareas, additionalreports please goto

Contact Information pdf/CMARtables_HonoluluHI_15.pdf this HMA,goto For tothehousingmarketfor additionaldatapertaining single-family andmultifamily buildingpermits. of theseestimatesareincluded inthediscussions Some of activity. thisadditionalconstruction makes anestimateof on localeconomicandhousingmarketconditions. government officialswhoprovided dataandinformation sourcesandstatelocal appreciation tothoseindustry fied bysubsequentdevelopments. HUDexpresses its sources. Assuch,findingsorconclusionsmay bemodi datefromlocalandnational tion available ontheas-of ­ aspossiblebasedoninforma are asthoroughandcurrent and MarketAnalysis Division. Theanalysis and­ guidelines andmethodsdeveloped byHUD’s Economic The factualframework forthisanalysis follows the may beunderconsiderationbytheDepartment. insuranceproposalsthat anymortgage of acceptability regardingthe tomakedeterminations does notpurport housing marketconditionsandtrends. Theanalysis builders, mortgagees, withlocal andothersconcerned tion, findings, andconclusionsmay alsobeusefulto HUDinitsoperations. Thefactualinforma guidance of This analysis fortheassistanceand hasbeen prepared [email protected] 213–534–2464 Los Angeles HUDFieldOffice Nakano,Ikuo Jerry Economist http://www.huduser.org/publications/ . . findings - - -