Bakersfield home market continues to cool
Aug. 25—Higher interest rates are having the expected effects on Bakersfield home prices as prices and sales volume fall commensurate with state and regional trends that observers see as the market stabilizing after two years of exceptional demand.
The median price of an existing house in the city slid 3.9 percent last month to settle at $365,000, while that of a new home in Bakersfield decreased 5.3 percent to reach $447,500, according to the latest update from local appraiser Gary Crabtree. Statewide, the existing median was reported to be off 3.5 percent at $833,910.
Notably, both Bakersfield measures have so far held well above their marks from a year prior. That was not the case across the state, where the California Association of Realtors reported the median sale price was up just 2.8 percent from July 2021 — the smallest increase in more than two years — compared with Bakersfield's 9.9 percent jump for existing homes, year over year, and 25.5 percent for new construction in the city.
People in the industry view recent price decreases as a reflection of eroding affordability. The Federal Reserve's moves to raise a key interest rate a total of 2.25 percentage points since mid-March have cooled the economy somewhat as part of a campaign to curb inflation, but it has also made it harder for homebuyers to qualify for a mortgage.
The unsurprising result has been a slowdown in sales activity that has allowed the local inventory of homes for sale to increase, which President Anna Albiar of the Bakersfield Association of Realtors said is welcome news for buyers who too often lost out in bidding wars or ended up with a home they might not have chosen if they'd had more time to deliberate.
"The numbers still look really, really good to me," Albiar said. "I think it's healthier that you have buyers and there's a little more inventory for them to choose from."
"We've been asking for it," she added. "Now that we've got it, we shouldn't be lamenting it."
A similar statewide view holds at CAR, whose president, Otto Catrina, said in a news release last week that despite the lowest affordability in nearly 15 years, "buying opportunities remain in the coming months for those who have been waiting on the sideline as more listings become available, competition continues to cool and rates begin to stabilize."
CAR reported its consumer housing sentiment index declined in July such that 76 percent guessed overall economic conditions won't improve in the next 12 months and only 16 percent indicated they thought it was a good time to buy in July.
The association also said 60 percent of consumers interpreted July's conditions as a good time to sell, down 11 points from a year earlier.
Meanwhile, the number of homes listed for sale in Bakersfield has continued to rise, and the number actually sold has dropped.
According to Crabtree, listings were up 10.2 percent month over month in July at 868. That's more than 84 percent greater than the total he reported in July 2021.
Sales of existing homes last month were 16.4 percent less than June's tally. At 649 transactions, July's sales volume of existing homes was 26.7 less than a year earlier.
Purchases of new homes in Bakersfield were up 2.4 percent month over month in July at 84. That was 20 percent fewer than sold in July 2021.
