Market Spotlight: Kitsap County

By a short ferry ride across Puget Sound, the Kitsap Peninsula and its adjacent islands offer waterfront homes; stunning city, sound, and mountain views; and an easy getaway to bucolic scenes westward toward Hood Canal and the Olympic Peninsula. Areas in Kitsap County selected for community profiles include Bainbridge Island and Poulsbo. The former’s proximity to Seattle means that Bainbridge Island in particular enjoys the best of exurban and rural lifestyles: for some, a place of refreshment after the daily commute. For others, a weekend hideaway or reward for retirement. Kitsap County is also home to military families and contractors at the Puget Sound Naval Shipyard at Bremerton.

Like Pierce County, this year Kitsap County shifted from a balanced market to a seller’s market, with average monthly supply tightening to 2.7 from 4.1 in 2014 and 4.9 in 2013. The monthly median home price of all homes on the peninsula reached $285,000 in June 2015, and the annual median settled at $258,500, a 7.71 percent increase year-over-year. The county is sufficiently remote that new construction is more speculatively priced than that found in markets closer in. As a result, monthly median price changes for newly built homes in Kitsap County have seen more volatility over the past two years than new homes in the three counties of the Seattle MSA; nevertheless, the trend in 2015 was higher. New construction peaked in November 2015 at $356,005, and the annual median was $318,100—12.4 percent higher than in 2014, the largest year-over-year increase in central Puget Sound.

At 0.9 percent year-over-year, population growth in Kitsap County was the second slowest among the seven counties surveyed, and 21st among Washington’s 39 counties.19 Nearly 71 percent of homes in Kitsap County are SFRs, compared with 56.7 percent in King County. Slightly less than two-thirds (65.2 percent) of the former’s housing stock is on unincorporated land.20 This is six times the proportion in King County, but not as much as in Island or Jefferson counties—markets that are beyond the reach of most commuters, but provide remote workers and retirees with a soulful refuge from the city.

These markets also provide insight on a commonly heard story of the last two years: the notorious bidding wars for real estate among buyers in western Washington. This was primarily a King County phenomenon—and within King County, it observably varied from one area to the next. Of the other six counties, only Snohomish saw significant amounts of such bidding. Markets further from Seattle were less likely to see bidding wars than seller price concessions as a result of their owners mispricing properties for sale.