Buyers' demand for homes coupled with a lack of supply has caused an burst of homebuilding in Kern County this year, builders and analysts say.
As the year winds down, building permits pulled for single-family homes in the city of Bakersfield are on track to top 1,000 for the first time since 2009 And countywide, the number of permits pulled has ballooned more than 400 percent compared to last year, although actual numbers are still low.
"We came from absolutely nowhere to still nowhere," said Robert Sawyer, principal building inspector for Kern County. "Any increase would have been 400 percent."
In unincorporated areas of the county between January and the second week of December in 2011, there were 82 building permits to buildsingle-family homes, Sawyer said. To date this year, there have been 355. That's an increase of about 433 percent.
Most of this activity has been concentrated in the metropolitan Bakersfield area, Sawyer said.
Still, 355 permits all year are nothing compared to the 175 to 185 the county used to see per month about six years ago at the height of the housing boom, Sawyer said.
"It went from being disappeared off the map to a little blip," he said.
In the incorporated city of Bakersfield, 994 building permits had been pulledthis yearfor single-family homes as of the end of November, according to city records. That's more than twice as many compared to last year's 422 permits.
Experts say the number of permits will top 1,000 by the end of December. The last time permits topped 1,000 was in 2009 when there were 1,087 permits. But it's still nowhere near 2005's 5,216 permits.
Why the surge?
"No supply," explained Gary Crabtree, an appraiser with Affiliated Appraisers who compiles data on the Bakersfield housing market each month.
As of November, there were 601 active home listings in the city. That's only three-tenths of 1 percent of the total number of single-family homes in Bakersfield, Crabtree said.
Supply is so low because investors bought up many properties that went into foreclosure, he said. Some of those they remodeled and flipped for a profit. But most they made into rental properties.
Building to meet demand is a change from the past, said Baynes Bank, vice president at Mission Bank. Bank has compiled a list of who has obtained building permits each year since 1994, when he himself used to work in real estate. Builders used to need to develop land because they couldn't sell their dirt plots, he said.
"They needed to monetize their dirt," he explained.
One reason for that demand is interest rates are low right now, he said.
Residential building is also following an increase in industrial and commercial building, said Sawyer, the county building inspector. As more industrial and commercial properties are built and more people move to the area for work, more homes are needed.
Matt Towery, a local homebuilder and owner of Towery Homes, provided a few more reasons for the increase. First, people are moving to the area for jobs in oil, agriculture and at distribution centers. Second, Bakersfield may have overbuilt during the boom, but not quite as much as other cities, he said.
Third, people are growing up, having their own families and needing their own homes. And fourth, interest rates are "ridiculously low," he said.
"It's the perfect storm to have, not a boom, but get back to normal," Towery said.
Through November, Towery has pulled 53 building permits in the city. Last year, Towery said he probably only got about 25.
And Towery has about 15 more properties for which he's ready to get permits. But he hasn't because his subcontractors don't have enough workers to keep up with demand, he said. With the lingering memories of laying off workers after the market crashed, subcontractors have been hesitant to hire people as the housing market is just starting to ramp back up, he said.
"Every sale gives the subcontractors more confidence," he said.
McMillin Homes, a multistate homebuilding company with developments in Bakersfield, has gotten permits for 91 homes in the city so far this year, said Carrie Williams, vice president of new home sales at McMillin. Last year, they pulled 62.
"For us, in 2012, it has definitely been one our strongest years," she said.
What's more is McMillin has zero unsold inventory, she said. That's because most of their sales have been of their dirt lots to build custom homes, instead of people buying homes already under construction.
Growth isn't limited to Bakersfield, though, she said. Elsewhere in the Central Valley where McMillin builds, such as Visalia and Hanford, the company has had similar demand.
Williams sees growth continuing into the new year as she hasn't seen any signs of a slowdown, she said.
When she heard the numbers for the citywide building permits, Williams said, "That's amazing."