Recent media reports have continued to sound the alarm about the gloomy housing market; foreclosures continuing to climb, prices still falling and homes going unsold. On the other hand. A recent article in Bloomberg Businessweek says the Bremerton-Silverdale area should expect selling prices to increase by 44.7 percent by 2014, a 9.7 percent increase per year, the highest rate in the nation. With apparently credible sources espousing such widely divergent views, it's no wonder people are unsure what to believe. And uncertainty is what makes markets sluggish.

Real estate markets are by definition local. You can't ship a cheap house available in Arizona to Poulsbo. So alarms about what is happening on the national level don't necessarily apply to the West Sound market, and often don't. That said, 9.7 percent appreciation per year for the next four years?!

I understand the bases for their argument. We have a relatively stable economy and employment due to the high proportion of government jobs. There isn't much building going on, limiting inventory growth. Our foreclosure rate is lower than other areas of the country. However prior to the big run-up that started in early 2002, we were averaging in the range of 3.3 percent price appreciation per year. They are suggesting about three times that while there is no sign of a price climb on the horizon.

My view is that the reality in our area will be somewhere between these two extremes, Chicken Little and bonanza. For the sake of home owners in the area (myself included), it would be great if Bloomberg Businessweek was right. But I believe that prices will continue to remain flat for at least the next year or two while people sort out the reality of the market, then start to climb at a more moderate, and in my opinion more healthy pace.