Demand down, supply up in Kitsap County

by Josh Farley, Kitsap Sun, November 11, 2007

Kitsap real estate prices leveled off in October while the number of homes on the market continued to rise, according to statistics released last week by the Northwest Multiple Listing Service.

There were 453 more homes for sale in Kitsap in October 2007 than in the past year, and those that did sell went more cheaply than in previous years.

The median price of a home sold in the county rose less than one percent, from $282,691 in October 2006 to $285,000 this year. And the median residential home price actually fell by about 1 1/2 percent. That was offset only by the sales prices of Kitsap condominiums, which climbed by about 54 percent to $358,000 thanks in part to condo projects on Bainbridge Island and Bremerton's waterfront.


The bottom line on the new stats, according to Mike Eliason, executive of the Kitsap Association of Realtors, is a supply-and-demand story.

The real estate boom of the early 2000s fueled a boom in construction of homes, Eliason said, contributing to supply. But the red hot market also contributed to money lenders' willingness to get anyone into a home who wanted one —regardless of credit. When the overall U.S. housing market finally turned south this year, it caused a flooding of foreclosures, and made even more homes available.

Central Kitsap experienced the highest rise in number of homes on the market, according to the MLS statistics. The Seabeck and Holly areas, for example, had 80 homes on the market in October 2006. In the same month this year, there were 142.

Demand, meanwhile, as lenders tighten restrictions on attaining mortgages due to fears of more foreclosures, has decreased. And national real estate trends aside, Eliason said that the market is entering its "winter cycle," where real estate activity is less.

Eliason said there's one other positive aspect of a the current market. While home values hit record levels in the past few years, that market made owning a home unaffordable for many — outside of the "subprime" or highly volatile adjustable rate mortgages that spurred the wave of foreclosures earlier this year. Eliason predicts a downturn of the median home price in Kitsap County, one that will be more accurately aligned with Kitsap's wage earners.

"We've pushed people out of the housing market," Eliason said. "Now we're going to start to see people coming back."