Home prices are going up across the nation — except, it seems, in Bakersfield.
According to a new report by the Case-Shiller National Home Price Index, home prices in the U.S. went up 6.1 percent in August compared to last year. July had a similar increase of 5.9 percent.
The index looked only at the nation's top 20 markets, but local analysts, supported by their own data and a recent U.S. affordability study, say median home prices in Bakersfield have remained steady.
“We’re very stable right now,” local appraiser Gary Crabtree said. “The median home price in Bakersfield is $235,000. It’s been that for the past five months.”
Crabtree said Bakersfield prices will usually see some fluctuation throughout the year depending on the season. At the beginning of the year, the median price was $215,000.
“The off-season market always sees a decline of 3 [percent] to 6 percent,” he said. “Spring and summer is the peak sales period.”
Median home prices in Bakersfield are less than half that of the statewide average. According to real estate marketplace Zillow.com, the current median price for a home in the state is $499,950.
That's why Bakersfield is considered to be the most affordable housing market among the state’s biggest cities, according to a recent study published by financial advice company SmartAsset.
The study looked at closing costs, property taxes, insurance, mortgage payments and median income over a period of five years in cities across the nation with more than 200,000 people. Cities with the lowest housing costs compared to the median income made the list.
The Valley cities of Fresno, Modesto and Stockton also made the list.
“We’re blessed that we’re one of the more affordable communities in the state,” said Midge Jimerson, president of the Bakersfield Association of Realtors. “Because we are affordable, it brings more people to our area.”
Nationwide, Bakersfield ranks 38th in affordability, according to the SmartAsset study. Fort Wayne, Indiana, took the top spot.
While lower prices may be good for buyers, Crabtree said the city’s affordable housing market hasn’t led to any surges in sales, and Realtors have difficulty selling pricier homes due to the city’s predominantly low-income population.
“We would need an increase in family income to afford higher-priced houses. We don’t have that,” he said.
Crabtree said about 90 percent of homes sold in Bakersfield cost $400,000 or less. The majority of them are in the $200,000-to-$300,000 range.
“There is a distinct barrier at $300,000,” he said. “Most people can’t afford any higher.”
Crabtree said Bakersfield residents used to have higher incomes, but that changed after the Great Recession, because of fewer jobs in the oil industry and other factors.
“We don’t have any meaningful job creation,” he said. “We’re highly dependent on the oil and agriculture industries, and oil jobs are declining. We continue to plug along, but there’s nothing really driving the economy here.”
While the recession that started in 2007 may be over, Crabtree said Bakersfield’s home prices still haven’t caught up to what they were.
“Home prices are still 22 percent lower than we had in 2006 at the height of the [housing] bubble,” he said. “Our economy is not the same.”
Those monitoring the local housing market don’t expect prices to rise substantially any time soon, and for some, a steady market is better than a declining one.
“I think the expectations are that it will stay the same,” Jimerson said. “If there’s a slowdown in economic growth, that would create a problem, but we’re hoping to have a better year."
Seattle defended its title as the nation’s hottest housing market, according to the Case-Shiller report. Seattle home values in August 2017 rose 13.2 percent from August 2016, more than double the national rate of 6.1 percent.
Las Vegas was next with a year-over-year increase of 8.6 percent, followed by San Diego at 7.8 percent. Los Angeles came in at 6.1 percent, right at the U.S. percentage increase.
To see the SmartAsset report, go to http://bit.ly/2i70jYR.