Kitsap County Trends Report...5

Executive Summary

DEFENSE-RELATED JOBS DECLINED AS PRIVATE SECTOR JOBS INCREASED:

1999 marked the fifth year in which employment in Kitsap County showed a decline in defense-related jobs that was offset by growth in the private sector. Civilian jobs at the County's five primary Defense Department installations fell by 1,600 in 1999 and now amount to only 64% of total DOD jobs as recently as 1993. At year end 1998, however, total employment; Kitsap County increased by 200 positions, with the largest gain coming in the services sector. Furthermore, the unemployment rate in Kitsap County in November, 1999 was 4.3% which is only slightly above the State average of 4.0%. The latter is, of course, heavily influenced by the red hot job market in the Seattle/Bellevue area.

Population as of April 1, 1999 was estimated at 227,700, an increase of only 700 (.3%) from 1998. In the past 19 years Kitsap's population has increased an average of 3% per year, but over the last four years the average annual growth has slowed to just over 1%. One of the apparent outgrowths of the anemic net population increase ( but also undoubtedly tied to broader demographic trends and increased competition from private schools) is the surprising fall in school district enrollment. The overall reduction was almost 2,000 students (6.5%), with Bainbridge Island being the only district in the County to experience an increase. The biggest impact was on elementary schools (a 9% decline) suggesting that this could be a long-term trend.

The apartment vacancy rate dropped from 7.2% to 5.5% and average rents climbed 3.5% to $612 per month. Kitsap County clearly has benefited from the high rents in much of King and Snohomish County and from little new apartment construction in Kitsap over recent years.

Kitsap County's single family housing market has also shown continued strength. "Days on market" averaged 91 in the first half of 1999 compared to 135 as recently as 1997. Median home prices in the first six months of 1999 were $216,000, up almost 9% from the 1998 average. Also, 784 (11 months annualized) single housing building permits were issued in 1999, up 18% from 1998-albeit 40% below the average annual permit rate in 1991-1995.

No mention of the County's economic picture in late 1999 can ignore the voter approval of Initiative 695 in November. Because of the measure's disproportionate effect on transportation - and particularly the State ferry system - the ultimate impact on the Kitsap County could be significant. Efforts are already underway in the 2000 legislative session and elsewhere to soften the blow. Furthermore, judicial review of I-695 is expected by yearend. Future editions of TRENDS will help quantify the impact of I-695 on the County.

BY
NED PALMER
BANK OF AMERICA
206.358.8954
FAX 206.358.8818