Is South Kitsap and Port Orchard on the cusp of becoming a viable alternative for King County residents being priced out of their housing market?

According to Mike Eliason, executive director of the Kitsap County Association of Realtors, the county already is an option. In fact, he says, a “huge percentage” of Kitsap residents now commute into Seattle. And, he expects that trend to grow.

With middle-income families in Seattle and King County scrambling to buy from a diminishing number of available homes, often competing for properties that get multiple offers, buyers have begun to take a look at Kitsap County as a potential nesting place.

“It’s a growing trend,” Eliason said. “And you can understand why. There was one instance where a house in King County had 32 written offers. It’s just unreal. With the price appreciation in King County, you get to that elasticity where a certain percentage of home buyers either can’t afford to buy or realize they can get more for their money by moving into neighboring areas.”

After exhausting their search in King County, many buyers start looking at Snohomish and Pierce counties. While they may find more reasonable pricing, Eliason said, buyers are get better pricing but accepting longer commutes — sometimes up to an hour each way — into Seattle.

By contrast, homebuyers in Kitsap County may face similar commute times, but instead of crawling along on I-5 or 405, commuters can take a more relaxing ferry ride and bypass the freeway grid.

Kitsap, however, isn’t without its own challenges. Eliason said Bainbridge Island, with an easy ferry commute to downtown Seattle, often is the first choice for buyers exploring the Kitsap alternative.

“Prices in Bainbridge are approaching Seattle’s,” Eliason said. “So, many buyers are now turning to Central Kitsap, Bremerton and Port Orchard. The biggest factor is the availability of ferry service, and these areas have that access.”

Pricing isn’t the only determining factor, he acknowledged. Many of his real-estate agents report that clients, dealing with increasing urbanization density, school concerns and congestion, are seeking a better quality of life in addition to affordable housing.

Bryan Petro, a broker with Windermere Port Orchard, concurs. “We’re starting to see agents coming from West Seattle who’re showing some of our newer homes on the market here,” Petro said. “Compared to the I-5 corridor, it’s very reasonable here in the South Kitsap area and a person can get a lot for their money.”

Both Petro and Eliason said the pricing lag here is part of a historical trend for the region. Real estate sales react to the ebb and flow of economic conditions in the Seattle urban job market, national recessions and economic growth spurts. That reaction takes months, if not years, to materialize. One factor over the years has been the perception that it’s easier — and quicker — to get on the freeway and commute than it is to take the ferry.

“The market here is going to heat up more and more because, how far out of Seattle can builders go?” Petro said. “The commute between Seattle to Everett is a daily nightmare. I’d be one grumpy old man if I had to face it each day.”

For homebuyers in King County, homes in the $200,000 to $300,000 range are nonexistent. In Kitsap, particularly on the south end, there still are well-maintained, roomy homes available for sale in that price range. That’s a draw, and a pleasant discovery, for Seattleites searching for a new home. A $250,000 property in Port Orchard would command a price between $700,000 and $800,000 in Ballard, Eliason said.

The median price on closed sales in Kitsap last month was $260,000, a 7 percent increase compared to one month ago last year.

But while pricing in Kitsap is alluring, the inventory of available homes here is low — as it is throughout the Puget Sound region. Inventory in the county dropped 33.57 percent in August compared to the same month a year ago. That’s a greater drop than in King County, which had a 29 percent decrease. Eliason said there is only 2.53 months’ supply of available home on the market in Kitsap. Industry experts figure a balanced market to have between four to six months of inventory.

Low inventory is pushing prices higher everywhere. Pending sales in Kitsap County in the year preceding August surged by 18.76 percent, according to the real-estate agent association. Its statistical report shows 557 pending sales in the county in August, 88 more than the 469 reported in August 2014. But while sales increased, inventory cratered.

“We’ve been noticing a trend in the south end that shows prices escalating a little higher,” Eliason said. “South Kitsap is getting pressure with the higher prices in King County as well as from people living in Silverdale and Central Kitsap who are now looking at Port Orchard.”

Buyers seeking a home in the $200,000-$300,000 range have plenty of company. In fact, that’s the hottest, most competitive price range in the county, Eliason and Petro agreed. The association executive director said Kitsap properties in that range are beginning to receive multiple offers.

There’s a similar migration of Kitsap housing shoppers looking outside the county in search of cheaper prices. Eliason said a broker in Belfair reports a surge of Kitsap buyers looking at Mason County, where the median home price is $160,000.

So, with increased demand and low inventory, what options are available for home buyers?

New housing starts are an option, but this area’s unique geography makes that problematic. Waterways, existing urban growth and mountainous terrain surround the region. Unlike in areas in the Midwest, the answer isn’t to just build out north, south, east and west.

New housing starts are lagging in Port Orchard, Eliason said. “Builders haven’t caught up with the marketplace, with the exception of McCormick Woods.”

He said in the county, Poulsbo has taken the lead in new housing starts but Port Orchard is showing signs of resurgence. Housing starts are increasing slightly here. “Between 60 and 70 starts were begun last year in the city,” he said. “We’re projecting about 100 this year.”

Environmental concerns and traffic congestion considerations also are impacting new housing starts. Eliason said all areas in Puget Sound are having difficulty managing growth. “In Port Orchard, you have about $85 million of transportation projects that need to be funded. As with everything else, there just isn’t enough money to do all of it,” he said.

The Port Orchard City Council has been reviewing options for assessing building impact fees for each new housing start. Eliason said his association is working with the city to find a assessment level that will provide a funding source for transportation projects, but not discourage growth.