Kitsap Real Estate Blog

Highest Rate of Appreciation On This Home In The Country?

No doubt about it, the real estate market outlook has been bleak for a couple of years now. Kitsap County has not experienced the trauma of say Detroit, MI but median prices are down year to year, days on market have been lengthening, Realtors have been feeling the pinch, foreclosures and short sales are up, etc.

But what will the market bottom look like? Many experts agree that the market top probably occurred in late 2006 or early 2007. Things still felt pretty hot with multiple offers on many properties and sellers were still pretty smug. It was several months after the peak before the majority of people really felt it. Could we be at a market bottom now or soon?

There are some signs that might be the case. US News and World Report has ranked Bremerton-Silverdale as the top MSA in the country that will enjoy the fastest price appreciation over the next ten years. Why? Their premise is that the Puget Sound Naval Shipyard, the Puget Sound’s third largest employer provides steady reliable income and when families’ incomes increase so do home prices.

It’s nice to get a shot in the arm from a national news source. It could mean that the next 3 months are the best opportunity to buy in all of Kitsap because of the perfect storm of low prices and low mortgage rates. The enormous growth in the federal deficit and money supply could portend some serious inflation if the economy begins to recover ever so slightly. Rates have bumped up off what appears to be the bottom in recent weeks to 5.25 to 5.5%. I suppose the high wages at PSNS have more than kept pace with inflation over the years but compared to the diversified, robust private sector economy of King County Kitsap usually loses out in income and population growth to our eastern neighbor. There is no reason to expect that Kitsap’s population growth will accelerate over the roughly 1% per year average of the last five years. Of course, starting from the relatively lower price base here perhaps USNWR could be right on the money as far as the rate of home price appreciation. It happened before in the last run up.

Conclusion: Buyers can buy at today’s prices with a high degree of confidence that they will not lose money if they stay in the home for at least 3-5 years. They have an opportunity to lock in low rates an  d low payments at what are historic lows. “Shadow inventories” (i.e. bank owned properties, listings that expired unsold, short sales and other distressed sales) will continue to hold prices down for at least 12-18 months. If sellers really want to sell or need to sell they will still need to price their offering skillfully. Buyers have a lot of alternatives.

How can you read the tea leaves about real estate market cycles? The National Strategic Investors Corporation is sponsoring a free educational webinar by Robert Campbell, author of “Timing The Real Estate Market”. He will teach us how to gather, compile and analyze the data to tell you what point you are at in the real estate market cycle for any particular MSA. Follow this link to register:

Market Timing Educational Webinar