At a track meet the two rival high schools had finished first and second. One school newspaper reported that they finished first. The other school newspaper though, reported that they had finished second with the other school finishing next to last. This is a good example of how the local newspapers have reported on the Kitsap Housing Market. The national real estate news has been filled with negative reports on the housing market for approximately three years. Though this has mostly been a result of the market in only five states, it has filtered through the entire country. In Kitsap County the real estate market has suffered because of this national and local publicity.

So here goes the rest of the story — In approximately 2002 a Seattle-based developer came to Kitsap County. He did well and word got around. By 2004 National and Seattle-based developers were buying ground and submitting permits to start development and building in Kitsap. This process takes two years at best and can go three or four years. In 2006 we saw the start of these developments come on line. At this time we were at a two-month inventory level — a seller’s market. By the middle of 2006 the inventories of homes started to grow while sales stayed about the same. To add to the problems nationally, banks had been very lax with their lending guidelines and some bad loan products were out there. We in Kitsap had the same thing but to a much lower degree.

At the end of 2006 we were seeing less of a seller’s market with a balanced level of +/- six months inventory of homes on the market. By the middle of 2007 we were into eight to nine months of inventory. Anticipated growth from the Narrows Bridge did not happen, and with the negative national election campaigns kicking into high gear, sales slowed.

Fast forward to today and we currently have 12 months of new and used homes on the market based on current sales and housing numbers. It sounds bad but six months is a good goal and this is definitely not the first — or worst time this has happened. This can change in less than two to three months if sales pick up only slightly. Keep this in mind. Builders have slowed or stopped building and a lot of used homes will simply be taken off the market and wait for it to turn.

One of the quotes I see in the paper is the 30 percent increase in foreclosures. In looking for the source of this information, it is clear that is an educated guess. This information correlates with “Notice of Foreclosures” recorded at the auditor’s office. It does not indicate the actual number of Trustee Deeds recorded . The auditor can’t track that data. The overall number of “Notice of Foreclosures” is not high. This is a product of the stable economy we enjoy here.

The good news is according to the Wall Street Journal, in May 2008, “The Crisis Is Over.” Nationally the discussion is housing led us into this and housing will lead us out. And nationally it is starting. What will lead us out is affordability. As noted in the Wall Street’s article in the 1990s and early 2000s, it took 19 percent of average monthly income to service a conforming mortgage on the average home purchase. By 2005 and 2006, it was absorbing 25 percent of monthly income. For first time buyers, it went from 29 percent of income to 37 percent. That proved to be too much.

Bottom line: Affordability. The best interest rates, the best selection, the best prices and incentives that will, not may, go away as the news gets out. As sustainable recovery starts expect to see prices and interest rates rise, as they are currently artificially low. Banks have cleaned up their act. If you buy now you will see the benefit of buying low and ride the rebound of the housing market. Though not what we have seen in the past, still a great deal with low risk.