Kitsap Real Estate Blog

Josh Farley in the Kitsap Sun posted an article on February 19, 2007 reporting that the Washington State Employment Security Department found that approximately 10,000 new jobs were created in Kitsap County from 2002 through 2006. 10,000 new jobs is a big deal for Kitsap County real estate. New job creation is one of the primary drivers of housing demand and Kitsap commercial real estate demand. You can look back in some of my previous posts for a discussion of other factors.

A good place for real estate investors and homeowners to follow information like this is in the Trends Report for Kitsap County published by the Kitsap Consolidated Housing Authority. They use the same source cited by Mr. Farley.

Even though I follow the Trends Report closely this article caught me by surprise somwhat. I hadn’t really “felt” this event in my observation of Kitsap real estate markets. Can’t argue with the data but in closer scrutiny a couple of things pop out for someone interested in how this might affect real estate values. The jobs created for the most part are either construction or service jobs. While any increase is good for the income of people in the area what economic development professionals call primary jobs are more important to the development of an economy and consequently real estate values. A lot of people think of primary jobs as manufacturing, research and development and the like. Others advocate a broader definition to include any job that imports cash into the area. Whichever definition you choose, retail and service jobs don’t import cash.

Another reason primary jobs are important is that they tend to create even more service jobs, something like a ratio of 2.3 new service jobs for every primary job created. New jobs, new families, new housing demand means upward pressure on values and incentive for builders to build new homes. Too much new inventory means downward pressure on values, especially for older homes competing with newer ones. large homebuilders are setting the stage for perhaps at least thousands of new homes in new subdivisions. The astute homebuyer and investors must be diligent in their research or should be working with professionals that can provide them the best insite on market conditions.