Bakersfield’s single-family housing market is on the upswing, say local real estate professionals, and there appears to be hard evidence to back up their bump in optimism.
Local appraiser Gary Crabtree, who for years has produced a monthly, subscriber-only report designed for real estate professionals, said several factors are pointing toward a positive trend beyond the cyclical upswing typically seen in the spring and summer months.
“Unsold inventory is declining,” Crabtree said. “That’s a good thing. It means we’re moving more toward a seller’s market.”
The drop in supply has lowered the unsold inventory in March to only about two months’ worth, down 21 percent from the previous March.
Crabtree views the tightening in the market as a good thing, especially coupled as it is with a 3.3 percent year-over-year increase in closed existing sales, increasing from 544 in March of last year to 562 last month.
Linda Jay, CEO of the Bakersfield Association of Realtors, doesn’t disagree, but noted that when unsold inventory drops that low, competition among sales associates must surely increase.
Nevertheless, she said, there’s a perception among local Realtors that the market is improving.
“From the standpoint of our members, people are very optimistic, the buyers are optimistic,” she said.
Some of the improvements in the market have been driven by new home construction.
“We’ve had a pent-up demand for years,” she said.
Areas of the city where the action is hottest include the northeast, where construction has been completed on Fairfax Road and Morning Drive. Some areas in the city’s southwest are also seeing a burst of new home construction.
“There’s a misconception that real estate agents don’t represent new construction. We do a lot of new construction,” said Jon Busby, a broker-associate with Miramar International Mill Rock.
Busby said Crabtree’s assessment is “spot-on,” but noted that while home sales are brisk, once the price tops $300,000, demand tapers off. He attributes that phenomenon, at least in part, to layoffs and transfers of higher-earning employees in the oil industry following the downturn in oil prices.
Busby reads the numbers as welcome evidence that residential real estate is coming back healthy, but he’s not popping champagne corks just yet.
Median closing prices are up, while the number of days homes typically remain on the market continues to decline, Crabtree said, as more buyers enter the market to compete for a decreased supply.
“There appears to be a buying frenzy taking place with numerous properties receiving multiple offers with the highest and best offers asking for no concessions,” Crabtree wrote in his preliminary report for March. “It’s my opinion that that this phenomenon is being caused by increased optimism regarding the economy along with a small panic caused by increasing interest rates.”