Housing market down but not out
By STEVEN DEDUAL
Central Kitsap Reporter Staff writer
June 15, 2009 · Updated 12:18 PM
In a June 4 article on the US News & World Report Web site titled, “The Top 10 Housing Markets for the Next 10 Years,” the Silverdale/Bremerton area is making top grade.
“Home prices in these 10 cities will appreciate handsomely over the next decade,” said Luke Mullins, who ranked the Silverdale/Bremerton area as the No. 1 best housing market for the next 10 years, based on data compiled by Moody’s economy.com, an “independent provider of economic analysis, data and forecasting and credit risk services.”
Mullins said while “home prices at the national level [are] down a painful 32 percent from their 2006 peaks,” real estate still offers benefits to the long-term investor, especially in specific markets.
“The truth is,” he said, “despite the ongoing housing bust, the overwhelming majority of America’s real estate markets will appreciate over the next 10 years, although some more handsomely than others.”
Mark Zandi, chief economist at Moody’s economy.com, was asked by Mullins to explain why certain areas will experience more appreciation than others.
“In the long run, subtracting from the ups and downs of the business cycle, house prices should grow at the rate of household income,” he said. “If people’s incomes are rising, then they will buy more housing and house prices will rise.”
Moody’s Economy.com sorted employment and population statistics and “analyzed geographic and industry trends to generate 10-year home price projections for each of the nation’s 384 distinct metropolitan statistical areas.” The information gathered was then used by U.S. News to create a list of “the top 10 housing markets for the next 10 years” which has the Bremerton/Silverdale area ranked first.
A 5.2 percent increase in home prices over the next 10 years would see the median home sale price of $266,500 in Silverdale in 2008 rise to more than $440,000 by 2018, according to Moody’s. The reason: stability.
Mullins writes, “The neighboring cities of Bremerton and Silverdale, Wash., are located on the Kitsap Peninsula, a slip of land surrounded by more than 300 miles of coastline in lovely Puget Sound. Although the Pacific Northwest greenery is enticing, it’s the cities’ stable economies that should drive home price gains in the coming years. A large military presence of the U.S. Navy in particular helps insulate the local economies from volatility. Meanwhile, the nearby cities of Tacoma, Wash., and Seattle provide additional employment to the area’s roughly 240,000 residents.”
Silvia Klatman, executive director of the Bremerton Area Chamber of Commerce, was interviewed by Mullins for the article and said after its publication the numbers are not a reflection of only Bremerton and Silverdale.
“I just wanted to clarify that, although the article referred to the two communities, it’s actually the Metropolitan Statistical Area (MSA), which means it’s pretty much the entire county,” she said.
Klatman said there are several reasons for the prediction by Moody’s.
“Housing prices in our area didn’t balloon to the levels of many other areas of the country in a short period of time and purchasing a house still remains within reach of many people looking to purchase in our community,” she said.
Klatman also cited the military as a reason for our position atop Mullins’ list.
“The military’s strong presence in Kitsap adds to job and housing stability,” she said. “Major layoffs in manufacturing, service and technology sectors are devastating entire communities elsewhere, however, Kitsap has historically not participated in the ‘boom-and-bust’ cycles of other parts of the U.S.”
Darla Murker, executive director of the Silverdale Chamber of Commerce, also spoke with Mullins on the phone when he was researching the article.
“We talked a little about the quality of life with regards to the atmosphere of the county and how we enjoyed the feel of a smaller community but had the amenities of major metropolitan areas like Seattle and Tacoma,” she said. “I think the ranking in either case speaks to the resiliency of our community, especially given the current economy. People who live here know it is a quality place to live, work and play. They see the value of all that the area and the individual communities have to offer.”
Murker said she wanted to do a little checking of her own into the figures used for the article.
“I want to do a little bit of research into the Moody’s Economy.com to see what they said and how they based their decisions,” she added.
Edit note: Edited June 15 to reflect proper home value estimate for 2018.Contact Central Kitsap Reporter Staff writer Steven DeDual at firstname.lastname@example.org or (360) 308-9161.