Guest column: Motivated homebuyers find competition heating up
| Friday, Aug 28 2009 11:09 AM
Last Updated Friday, Aug 28 2009 11:09 AM
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J. R. Lewis
As anyone who pays any attention to real estate can tell you, it is a great time to buy a house.
Prices are lower than they have been in years, interest rates are more favorable than at any time in my adult life, and the U.S. government is providing an $8,000 tax credit to first time buyers.
As a Realtor, I am pleased this message has received so much publicity. After a rough 2008, phones are ringing in real estate offices all over town and buyers are taking advantage of the favorable market.
It is important to understand that even though now may be a great time to buy, it is not necessarily an easy time to buy. Buyers in Bakersfield’s real estate market today must understand they are competing with very motivated buyers for the best properties and competition is tough. Why is this so?
It has everything to do with inventory, the number of available homes for sale. Simply put, demand is high and supply is low. Supply is very low.
To put our inventory in perspective, let’s look at how it works for a buyer right now. Let’s say our subjects, Mr. and Mrs. Buyer, can afford to go as high as $250,000 for a home in Bakersfield and they need a three-bedroom house with at least two bathrooms. With such broad criteria, Mr. and Mrs. Buyer have plenty of options as on the day of this writing there were 535 homes listed for sale in Bakersfield under $250,000 with the appropriate number of bedrooms and bathrooms.
However, Mr. and Mrs. Buyer have spent a lot of time online looking at listings and have decided they don’t want to waste time looking at homes under $200,000 and they want to live on the west side of Highway 99. Now there are 91 homes, which is still lots of choice.
After looking at a few more houses, Mr. and Mrs. Buyer decide they want a newer home and they really want to live close to Mrs. Buyer’s work in the northwest. So they only want to look at homes that were built in the last 15 years that are west of Highway 99 and north of Stockdale Highway.
Now there are only 33 homes available.
But the Buyers have been shopping for homes in Bakersfield’s legendary August heat and they realize they want a pool. Suddenly there are only six homes that meet their desires. To buy one of these six, Mr. and Mrs. Buyer will have to compete with others who share their tastes. And to get the home they want, they may have to offer more than list price, take a chance on a short sale or purchase a home “as is” with no requested repairs.
These are the realities of our market. It can be a time-consuming and somewhat frustrating process for buyers. The rewards are well worth it. Working with their Realtors, buyers are successfully navigating our market, buying their first home and obtaining a real piece of the American dream.
— J. R. Lewis is sales manager at Karpe Real Estate Center. These are the opinions of Lewis, not necessarily The Californian’s.
