Long considered the most affordable area of Kitsap County, South Kitsap is rapidly catching up to the rest of the county in real estate values — and prices.

The Greater Kitsap area is rocking. Houses are barely listed two days when purchase and sale agreements are already signed. Real estate agents have to be on their toes as soon as any listing goes up, and first-time buyers looking for a three-bedroom starter home are more out of luck than not.

Ask any Kitsap real estate agent and anyone will tell you the market is active, the inventory is short, and things are not looking to get better any time soon. When the interest rates go up, things may slow down but likely not enough to make a big impact — there is a huge backlog of buyers desperate for a home priced less than $200,000. There are plenty of manufactured ones to go around, but the stick-built ones are selling like hot cakes.

South Kitsap used to be the most affordable in the area, and to some extent that’s still true, agents said. But the market there is moving up with the times. Underappreciated for many years, home prices are slowly starting to catch up with Silverdale and other areas.

A three-bedroom home with a garage that cost $80,000-$90,000 in Port Orchard two years ago now sells for about $125,000, says Ron Kimball with John L. Scott. Even so, “there are more buyers in the market than there are homes available,” he says.

“It’s going gangbuster,” says Dana Soyat with Port Orchard’s Windermere office. “There is a good mix of people coming into the Port Orchard area from Seattle… If a house is priced competitively, it’s gone.”

What makes the market even tighter is the lack of new buildable land and increased costs of materials coupled with Growth Management Act regulations that are adding extreme expenses to new construction. Add that to population growth and more people being attracted to West Sound’s quality of life. And even with prices going up, the homes are still much more affordable in Kitsap than in the Seattle area.

“People are starting to realize the value. Kitsap has a lot of open spaces and more waterfront per square mile than anybody in the United States,” Soyat says.

Linda Rowe, owner/manager of RE/Max Town & Country in Port Orchard, says there is not as much difference in South Kitsap prices as in the past, and the values will soon catch up with Poulsbo and Silverdale areas. “I believe after the elections and as early as summer when interest rates go up, things will slow down a little and eliminate some buyers, and sellers will have to price their homes more competitively,” she says.

West Bremerton is also becoming very attractive for buyers of less expensive homes, especially because there is more inventory there, says Lee Avery of John L. Scott. “Our market time in Port Orchard is so quick, but in Bremerton inventory has higher volume. We have nothing in Port Orchard under $150,000 that is stick built, with three bedrooms and a garage,” she says. Any time a competitive home goes up for sale, homeowners are receiving multiple bids within hours, which means buyers have to be ready to go — with pre-approved financing and all the research done that will help them figure out if they are getting a good deal.

Avery says with the lack of new construction and homes in general, the growing generation is especially impacted, as young families want to stay in the community they grew up in but can’t find a home to settle in. “Those of us who have growing children want to see them stay in the community but they are forced to move away because they can’t afford the houses here,” she says. “The situation will not get any better unless there is more buildable land.”

Even land goes quickly, sometimes within a day or two, and many agents say the interest rate increase that is imminent will not deter buyers, they’ll just have to settle for less home for their money.

So if Port Orchard five years ago had the best home values but that no longer seems to be the case, where are people buying? The market is slower in Gig Harbor or Bainbridge Island — for anyone who can afford the prices. Although prices on Bainbridge don’t seem to be growing as fast, it’s because they have pretty much hit a cap for what people will pay. In Gig Harbor, there are enough home priced over $400,000 but for lower-end homes the story is the same.

With the second Tacoma Narrows Bridge, that area is predicted to become even more attractive, although some agents feel the bridge will not have as much of an impact as thought because the commute on Interstate 5 will not change, so people who have to drive will be in the same rough shape.