Executive Summary: The demand for housing in Kitsap County is still high in 2022. But experts predict a more balanced market, and slower growth in home values. As mortgage interest rates start to rise, buyers will rush to take advantage of the increased buying power while it lasts. This will continue to put pressure on the current housing shortage, along with population growth, as new construction struggles to meet the demand.
The days of skyrocketing home values may be over soon. But as pandemic-era policies allow for working remotely, more buyers are relocating to suburbs like Kitsap County. While rising inflation puts pressure on home affordability, experts don’t anticipate a crash in the real estate market. However, prices are expected to normalize over time, adding more inventory and bringing a welcome balance to the real estate market.
In Kitsap County, the demand for housing will stay high—especially for lower-priced homes.
Many millenials are entering the market to buy homes for the first time, due to strong job growth, low mortgage interest rates, and increasing rent costs. Up to 50% of new mortgages will be issued to millenials, mainly for entry-level homes.
Optimism will increase due to COVID-19 vaccine roll-out, new construction projects, and additional stimulus spending.
Nationally and locally in Kitsap County, new construction is on the rise, offering some hope of relief for markets that currently suffer from extremely low inventory.
As the vaccine distribution continues, there are signs that indicate a re-opening of the economy and in-person experiences could be in store for the year. And additional stimulus provisions may provide further relief for both consumers and homeowners who are impacted by the pandemic, allaying fears of an impending housing market crash.
While these and other changes signal optimism, they might also lead to more balance in the housing market — along with rising interest rates, which can reduce buyer competition over time and cause home prices to stop rising sharply. Additionally, Fannie Mae is tightening the underwriting criteria for second homes and investment properties.
Many homeowners will stay put, contributing to the severe inventory shortage.
According to Redfin data, today’s homeowners are typically remaining in their homes for 13 years, five years longer than they did in 2010. This is contributing to the inventory shortage, as the available housing market has dwindled to its lowest level in decades. Learn why homeowners are holding onto their properties.
Home values will continue to rise, but might start leveling out in comparison to years past.
Home values in Kitsap County have risen steadily in the last 5 or 6 years, driven largely by supply and demand—more buyers and not enough homes. But when homeowner values appreciate, some first-time home buyers get priced out of the market altogether. Even though mortgage interest have been low, affordability remains a key concern. Over-priced homes won’t sell as quickly, as the market tries to self-adjust. Click here for the latest monthly housing market update and statistics for Kitsap County real estate.
Kitsap County still has a good economic outlook.
Kitsap County is still poised for strong economic growth, thanks to a steady labor market and consumer spending. Employment has grown faster than the national average since 2012. Prior to the COVID-19 pandemic in the spring of 2020, unemployment was relatively low. While the unemployment rate has not fully recovered, new claims have dropped significantly compared to the start of the pandemic.
Food service, hospitality and leisure industries were hit hardest in 2020, but we can expect these industries to recover when the government permits businesses to re-open for in-person activities (and/or the COVID-19 vaccine brings relief).
Kitsap County’s steady military presence helps fuel the economy, with over 15,000 active military personnel, 20,000 civilians, and 500 federal contractors. Business and professional services jobs have been on the rise in recent years, and Amazon recently added hundreds of new jobs in Bremerton.
The population will continue to grow, faster than construction can keep up with the demand.
Our population has grown about 8% since 2010. Kitsap County is beautiful and quiet. And it offers more affordable housing than King County and other bustling regions near Puget Sound. Plus, commuter options are expanding with the Fast-Ferry system. That may be bad news for traffic and core infrastructure services, but a strong economy is good news for our community’s livelihood.
Nationally, home builders are expanding production to address the pent-up demand for additional housing. But local contractors are slammed, permits and inspections get delayed, and it’s getting harder to acquire or develop land. It will take years to construct enough new homes to provide relief.
Technology will continue to disrupt and evolve the real estate industry.
More than 90% of today’s buyers search for homes online. Buyers can use these smart tools to filter MLS listings by price, location and home features, create email alerts for new properties as soon as they hit the market, save their favorite homes, and get instant market reports or seller valuations. Savvy home buyers know that you have to act fast, and be prepared, to score a good house in a seller’s market.
For sellers, it’s not enough to rely on old-school marketing and traditional selling tactics. For maximum exposure to qualified buyers, using digital advertising is crucial. That’s why my marketing plans focus heavily on advanced audience targeting and digital media—at no additional cost to sellers. Any agent can blast some paid ads on Facebook, Google and Instagram; but as a media publisher, I specialize in digital advertising techniques that get you top-dollar offers. Call or text me at 360-979-6411 if you’re interested in a free consultation to discuss my marketing plan for sellers.
Are we in a real estate housing bubble?
While the Great Recession in the United States lasted from December 2007 to June 2009, it took many years for the economy to recover. That recession was driven in large part by the housing bubble, which burst when the housing supply out-paced demand. Unlike that time period, we are NOT currently in a housing bubble, as the demand far exceeds the expected supply. And even if a recession does hit the United States soon, remember that real estate values still increased during 3 of the last 5 recessions. If you’ve been thinking about making a change, 2021 is a great year to achieve your real estate dreams!
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