Strong economy and low inventory in the Bremerton-Silverdale HMA

Strong economy and low inventory in the Bremerton-Silverdale HMA

Sales housing market conditions in the Bremerton HMA, located in HUD Region 10, are currently tight, with an estimated vacancy rate of 0.8 percent.

The Bremerton-Silverdale, Washington Housing Market Area (HMA) sits on the western shore of Puget Sound across from the city of Seattle. The Bremerton-Silverdale HMA includes Kitsap County and is coterminous with the Bremerton-Silverdale-Port Orchard WA metropolitan statistical area. The HMA is home to the second-largest naval base on the west coast, Naval Base Kitsap, which serves as the economic center of the area. A recent comprehensive housing market analysis of the Bremerton-Silverdale HMA highlighted the economic and housing market activity in the area.

Local economy anchored by Naval Base Kitsap

Economic conditions in the HMA were strong before the pandemic, but countervailing measures taken to reduce the spread of COVID-19 depressed the local economy. In 2020, nonfarm payrolls decreased by 2.6 percent for a loss of 2,500 jobs, and the unemployment rate averaged 7.5 percent. Although the HMA lost jobs in nearly all sectors, the leisure and hospitality sector experienced an employment decline of 19 percent, or 1,800 jobs, representing approximately 70 percent of all private-sector job losses in the HMA during the fourth quarter of 2020.

The government sector is the largest employment sector in the Bremerton-Silverdale HMA, accounting for 37 percent of employment in the area. Naval Base Kitsap, with 33,800 employees, not only is the area’s largest employer by far, but it also supports an additional 13,950 jobs in the HMA through operations and personnel spending; as of fiscal year 2017, the base had an economic impact of $4 billion per year. From December 2019 to December 2020, the government sector added 600 jobs for an increase of 1.8 percent.

Other large employment sectors include the nonreporting service-providing sector, which accounted for 23 percent of area employment in 2020. From December 2019 to December 2020, the sector added 300 jobs, an increase of 1.4 percent. The trade, transportation, and utilities sector is the area's third-largest employment sector, accounting for 14 percent of area payrolls. From December 2019 to December 2020, employment in this sector declined by 5.9 percent for a loss of 800 jobs. During the fourth quarter of 2020, however, the sector added 400 jobs, attributable in part to the opening of an Amazon.com, Inc. distribution center in Bremerton in September 2020.

Over the next 3 years, employment growth in the HMA is expected to average 1.7 percent annually as COVID-19 public health measures are lifted.

High demand for housing amid low inventory

The Bremerton-Silverdale HMA home sales market is tight, with a vacancy rate of 0.8 percent. Demand for home sales increased during the pandemic, but the area had a low supply of for-sale homes; total home sales in 2020 were 21 percent lower than the previous year. Home sales prices increased by 10 percent during the same period to an average of $485,600.

The homeownership rate in the HMA is estimated at 70 percent, which is higher than the national average of 64.1 percent. The report partly attributes the high homeownership rate to migration from the Seattle area to the HMA and an increase in commuters with well-paying jobs.

The Bremerton-Silverdale HMA rental market is balanced, with an estimated vacancy rate of 4 percent. The apartment market is also balanced, with an estimated vacancy rate of 3.7 percent. Apartment construction has been increasing since 2015 but has not kept up with demand from population and job growth. Over the next 3 years, demand is expected for 3,125 new homes and 930 new apartments.

For more detailed information on the Bremerton-Silverdale HMA, see the recent comprehensive housing market analysis on the area.