Local market picks up for new, existing homes
Oct. 3—The single-family home market in Bakersfield regained lost ground in August, swinging from small declines in median prices one month prior to gains in the low single digits for new and existing houses, according to a report released Saturday.
Growth in sales volume, too, reversed earlier signs of slowing during a late summer month when homebuyers typically try to move in time for the start of school, appraiser Gary Crabtree said in notes accompanying the report.
Even as the Bakersfield market has moderated in recent months, it easily outperformed the state as a whole in August. The city retains an affordability advantage and is faring better than other regions experiencing more dramatic slowing.
After two years of exceptional demand in local home sales and rentals, activity in both has slipped under the dual clouds of inflation and interest rate increases. That makes Bakersfield's positive showing in August a welcome if not surprising change.
Crabtree said by email he's less optimistic for September's still unfinished tally, considering how rising interest rates are limiting households' purchasing power.
"I expect September's report will begin to show the data to support that we are entering a protracted real estate recession," he wrote. "Lenders have stopped lending or increased their rates to prohibitive levels."
President Anna Albiar of the Bakersfield Association of Realtors noted by email Monday the local and state economies, and their respective home markets, are faring well in the face of geopolitical tensions, rising inflation and other headwinds.
Local home sales activity is busier than it was before the pandemic, she pointed out, and listings are up in a still competitive environment. Interest rates have come down recently, offering a temporary window for buyers looking to lock in historically low-price mortgage loans, she wrote.
"We have every reason to remain optimistic with our local housing market," Albiar stated.
In August, according to Crabtree, the median price of an existing home in Bakersfield surged 1.9 percent to reach $375,000. That was 14.4 percent greater than its level 12 months earlier.
By comparison, California's median was up seven-tenths of 1 percent in August at $839,460, or 1.4 percent higher than its price a year before.
Sales volume for existing homes in Bakersfield was up 13.1 percent at 551 closings, while that of new homes in the city rose 35.7 percent to hit 114 transactions.
Statewide, overall sales volume increased more slowly, at 6.1 percent in August.
Crabtree's summary offered other comparisons suggesting conditions are changing within Bakersfield's home market.
He reported the median sales price of new construction in Bakersfield picked up 2.8 percent in August and was up 26.4 percent year over year. (In his July summary, Crabtree reported median prices for new construction had fallen 5.3 percent from June, while the median for existing homes was off 3.9 percent.)
Crabtree pegged the citywide, 12-month running average appreciation rate at 18.36 percent, or three points higher than a year ago. The average monthly supply of homes so far this year is up 38 percent from that of last year, he reported.
Bakersfield is still twice as affordable as the rest of the state, Crabtree noted, with an affordability rating of 34 percent as compared with 16 percent across California.
