Considering that Newsom is new Governor of California, how will he affect the Real Estate market in Bakersfield CA with the new plans he has to cut oil production? Will it be a great time to buy or no?
@Ulicer David villatoro this is a pretty tricky question but here is my opinion:
Regardless of the Governor choice, CA has been a Blue state for some time now. This inherently means that oil production is always going to be a point of contingency. To me, what matters most is what is happening outside of the politics.
For example, Amazon is in town with their distribution facility, L'oreal, Target, Walmart, Ikea, etc. all have distribution facilities that have been built here within the past few years. This is bringing a lot of sustainable jobs to the area because of the influx of technology and specifically the spoke and hub distribution model. Most businesses are going to a delivery based model which means that these distribution centers should only get bigger and more businesses will start opening them.
On top of this, we have a growing medical community for our growing aging population, and we are also starting to attract more entrepreneurs because of the cost of living but still being in CA based location. Also, we have the Agricultural community which we have been at the top of for some time now.
Next, we look at development. There is a brand new Hard Rock Hotel and Casino which will be built here in town, and there are also around 19,000 homes which are going to be be built within the next few years as well, just outside of the Bakersfield area towards the LA basin. This means more growth for the area as well.
There is still cash flow in Bakersfield which is very rare in a California community, and at the end of the day we are still in California so there will always be a pull to live in this area versus some of the other smaller markets around the country that can provide similar cash flow.
Thanks a lot for your valuable information, i can see how Bakersfield RE market can still sustain and be a cashflow friendly city.
The other thing that is interesting about the effect of the oil market on the Bakersfield housing market is to look at what happened when oil had a major slow down (bottoming in 2016) and had huge numbers of layoffs. The Bakersfield housing market was actually appreciating overall as oil prices crashed. The higher end of the housing market was much weaker than the lower end housing. There were high levels of inventory in the higher-priced brackets. Anyhow, I think history has shown that Bakersfield's housing prices are not well correlated to the oil market.
I see Gene, thanks a lot for sharing, that definitely gives me certainty of my next move, thank you guys again for sharing.
I was born and raised in Bakersfield and left when I went to the Marine Corps back in 1990. Since that time Bakersfield has doubled in size. It's not because of the oil industry either. It's close enough to L.A. without having to live there, and it's close enough to the Central Coast of California where I live now (Pismo Beach & Five cities area). The cost of living in Bakersfield is alot less than where I am now. With what the two gentleman said up above, the jobs are still in Bakersfield and growing. I intend to start investing there in the very near future and already have assembled a team to do just that.