Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
9y
The economy seems to be on a slow and steady upward climb. You don't need real estate appreciation to tell you that, you can see the signs elsewhere.
Mortgage rates have been at an all time low to stimulate economic growth and now everyone's talking about how rates are going to be going up. FHA is increasing limits as you mentioned. Locally, oil has been hit hard but other local economies are thriving. Local hard money lenders are now pooling together major capital and creating private lending institutions that are able to offer better terms than I've seen since the pre-crash good ol' days.
Home prices, yeah those are on a steady incline too (at least here in Bakersfield, not sure about the surrounding mountain areas). Starting off the year in 2012, the average sale price was around $150k. This year we started off at an average sales price of around $230k. Most of that upward increase was from 2012 to 2014. From 2015 to now, it's been a slow and steady increase of 2 or 3 thousand dollars each year added average home sales price, give or take. The slow and steady increase is a good sign in my opinion.
Investor · Thousand Oaks, CA · Member since 2012 · 176 posts · 47 votes
9y
Seeing a slowdown in Oildale area... Weaker appraisals. But overall doesn't seem like it's a hot market... Just steady and slow upwards trend. In some of the C areas it's steady with little appreciation 2-3% as I track the valuation of my rentals.
Anything over 250k+ seems to sit longer than the lower priced inventory.
Sweet spot seems to be 150k-190k.
Other than that I couldn't tell you too much more. If there was a recession I don't think prices would be hurt too much in Bakersfield. I think a recession would have little effect because of the safe loans being issued and the lower price point, and resource based jobs. As long as I buy with equity I feel very safe.
Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
9y
The economy seems to be on a slow and steady upward climb. You don't need real estate appreciation to tell you that, you can see the signs elsewhere.
Mortgage rates have been at an all time low to stimulate economic growth and now everyone's talking about how rates are going to be going up. FHA is increasing limits as you mentioned. Locally, oil has been hit hard but other local economies are thriving. Local hard money lenders are now pooling together major capital and creating private lending institutions that are able to offer better terms than I've seen since the pre-crash good ol' days.
Home prices, yeah those are on a steady incline too (at least here in Bakersfield, not sure about the surrounding mountain areas). Starting off the year in 2012, the average sale price was around $150k. This year we started off at an average sales price of around $230k. Most of that upward increase was from 2012 to 2014. From 2015 to now, it's been a slow and steady increase of 2 or 3 thousand dollars each year added average home sales price, give or take. The slow and steady increase is a good sign in my opinion.
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
9y
@Gene Hacker I think that below the $200K price limit we are seeing a market on fire, and because we are seeing prices increasing and generally stronger indicators that the market is increasing, we are starting to see the volume of sales start breaking above that $200K limit.
With oil where it is, and the jobs coming back, and farmers finally having enough water to grow their crops efficiently, our two big markets in Kern county are going to see a nice year, which in turn should help the market values increase.
Bakersfield prices are well below the previous peak, however, I am starting to see them creep up in some areas, and if we can continue this growth I think that people need to be weary of riding the cash train too long. Obviously, make money while you can but have a solid exit strategy.
We are having great growth in the markets, but if we keep growing at this pace interest rates will have to keep increasing to keep our economy from overheating, which could really stifle the lending market, and in turn could cause problems to those buyers needing financing to purchase their properties.
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes
9y
It looks like things are picking up for much of the Bakersfield real estate market.
A few key points to note from the news this last week:
Gary Crabtree is reporting that he is seeing the most multiple offer transactions than he has seen since the run-up in the late 2000s.
Busby states that he agrees with Crabtree but stated that demand falls when you get to homes priced over 300k. Crabtree was quoted stating that 80% of unsold inventory is priced at under 300k.
Medium home prices are up.
Average days on market is down.
Unsold inventory is down.
Sales are up YOY.
Ownership rates are lower than the national average.
All of these metrics are pointing to likely price increases in the next few months.
It is also worth noting that new construction is on the rise. Particularly in the NW. During construction, it is a boom to the local economy. But if they overbuild again, then surplus supply could lead to lower prices. It is hard to find solid data on the number of new homes being constructed but at this point, I personally think the market can absorb the new inventory.
It is hard to find data on the more rural areas of Kern County, most of the news is limited to the City of Bakersfield.
Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
9y
Good news. And I see it in practice. For the longest time post-recession, there wasn't a big issue with bidding wars, multiple offers, highest and best, etc. But for the last month or so it seems to be the case again. I've been losing a lot of offers to multiple offer situations. And I've also had clients that have had to keep increasing their offer price multiple times until finally getting it accepted due to bid wars, even in the $300k+ range!
The key right now is jumping on a deal the second it gets listed. With the market like it is right now, if you are buying anything less than $300k, you need to jump on it fast with a good offer, because 50 other investors are interested in that same property and they WILL jump on it quickly.
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes
9y
@Max Gradowitz - When you said "50 other investors"...are you talking about mostly multifamily or SFHs?
From my personal experience, it looks to me like much of the action in the middle area of the market (200k to 300k) is mostly owner occupant buyers. I am seeing more investors moving on SFHs under 175k.
Bakersfield, CA · Member since 2016 · 378 posts · 307 votes
9y
@Gene Hacker I should have clarified. I see this mostly with cheap rehab SFHs that make for good flips. Also multi-unit properties in need of dire rehab, like a good BRRRR opportunity. Basically anything that investors and their agents are constantly scouring the MLS for each day. That seems to be really hot and competitive right now.
I wasn't really referring to your typical turnkey average priced SFR, however I'm sure that market is hot too right now for medium price range to lower price range homes. Once you get over $300k or so with SFRs (as you said earlier), I'm not seeing much multiple offers there - in fact it's kind of hard to sell SFRs over that price range still.
Investor · Frazier Park, CA · Member since 2014 · 70 posts · 14 votes
9y
@Gene Hacker Lower square footage could also factor in. I think most occupant buyers are wary of getting out of their comfort zone -existing or new construction - and builders may well be building to suit this need for those that are looking to buy new.
I occasionally do new home inspections in Bakersfield. Most have been around or just under 2000 Sq.Ft. I have not had many "McMansions" with the huge square footage. Of course, this is anecdotal. It would be interesting to see what the median square footage is of new homes recently sold in Bakersfield and it would be interesting to see how it compared to periods of the past.
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
9y
@Gene Hacker looking at new construction today I have been seeing houses starting in the 1300-1400 SF range and going up from there depending on the area of town you are looking in. However, @Rachael Collins brings up a good point because if you look at the smaller new construction homes that have sold in the past year, there are many that started in the 1100-1200 Sf range.
Looking on the high side, previously we were seeing a lot of houses in the high 2000's however now we are are seeing a push in the limits above 3000 SF. Part of that is coming from the multiple generation living style that some families are now starting to get into which I have mainly seeing on the South side of town.
bakersfield, CA · Member since 2017 · 1 post · 0 votes
9y
My name is Gurvinder recently graduated from nursing school and my next goal in life is to invest in the housing market I'm 24 and if anybody can give me advice that will be great
Real Estate Agent · San Jose, CA · Member since 2017 · 111 posts · 66 votes
9y
Very insightful thread. I'm trying to get a 3 bd 1 bath sfr with a room attached to the dethatched garage. on California Ave. Seems to be a good neighborhood, right by the high school. And after a rehab I think I can get a decent return on it or possibly rent it out for some cash flow. Any one have luck investing around the high school?
Investor · Sacramento, CA · Member since 2010 · 161 posts · 29 votes
9y
@Johnny Hoang, Which High School BHS? Pretty decent if its on the West side of South H st, Oleander neighborhood. Most of the Oleander neighborhood is pretty decent. When you go East of South H, passed Chester Ave, it tends to get a bit more of C class area. South of California ave
@Johnny Hoang, Which High School BHS? Pretty decent if its on the West side of South H st, Oleander neighborhood. Most of the Oleander neighborhood is pretty decent. When you go East of South H, passed Chester Ave, it tends to get a bit more of C class area. South of California ave
Yes, it is Bakersfield High School. Thank you for letting me know! Unfortunately, the deal fell through so I'm back to the drawing board. Hopefully, I can find another good one soon!
Flipper/Rehabber · Lake Isabella, CA · Member since 2011 · 969 posts · 488 votes
8y
It has been one year and we have some data:
Kern County prices are up 7.7 YOY
Kern County home sales are up 20.9%
Not a bad year.
With prices of existing homes rising to over $140/sq.ft. in Bakersfield, they are closing the gap compared to the prices of new homes. Because there is no shortage of buildable land, prices of new homes could stay at this level for a while. I can see a lot of buyers choosing new homes. I wonder how much of a headwind this will be to price appreciation of existing homes going forward.
Rental Property Investor · Los Angeles, CA · Member since 2019 · 160 posts · 58 votes
5y
@Sanjeev Advani am hearing it’s not a good time to buy? Inventory is low and interest rates are also. But is the pandemic really making it tough on buyers or lenders tk make think not to buy?
Investor · Bakersfield, CA · Member since 2015 · 483 posts · 234 votes
5y
@Javier Rosales inventory is low. Interest rates are low. If the deal makes sense and you are planning on holding a small blip in the market doesn't really make a difference. Its those people who are looking to flip their properties that should be worried about the impending doom. If your property is worth $200K today and you earn $20K/year in rents thats a 10% return. If you continue that 10% return but the property drops to $175K next year, and is back up to $210K within the next 5 years, is that really a bad deal?