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Gap widens between Bakersfield's home supply, demand

A worsening imbalance between housing supply and demand has again driven local single-family homes prices to new heights, lately forcing some conventional buyers to take special measures to beat out all-cash bidders.

The median price for an existing single-family home in Bakersfield rose more than 3 percent in April alone to reach a record $319,950 — up 17 percent from a year before, according to a new report by local appraiser Gary Crabtree.

The data fits into a statewide pattern of too-few homes for sale leading to higher prices and renewed concerns about housing affordability and market stability.

EXTRA MILE

Locally, would-be homebuyers have to submit more offers than before — generally eight to 10 — to be competitive amid the "feeding frenzy" for newly listed homes, said broker associate Camille C. Redmond at Walters & Associates Inc.

She said it's increasingly necessary to put up cash to cover the difference between a property's appraised value and its winning bid.

"It's really hard on on first-time buyers and our veterans," Redmond said. "The million-dollar question is, of course, how long is it going to last?"

April's market performance underscores the dramatic escalation of local and state housing markets during the pandemic. In Kern, an already low supply of housing has lifted rental and purchase prices as former big-city residents now able to work from home have seized on the county's strong affordability relative to coastal areas.

INVESTOR RESPONSE

Bakersfield real estate agents report investors are responding to the price trend. They say some are selling properties they've held for years, often thrusting former renters onto the home market, while others look for investment opportunities in modest neighborhoods.

"(Investors) are coming back, especially in some of the neighborhoods that are still in the softer price points," said Bakersfield broker Sheri Anthes at Coldwell Banker Preferred Realtors.

Crabtree, a longtime observer of the local market, sees Bakersfield's relative affordability within California as the "basic driver" behind recent sales activity.

Historically low interest rates have added fuel but he notes a key local distinction in Bakersfield's affordability rate: No less than 48 percent of city residents making the average household income can afford a home priced at the city's median. That compares with 27 percent statewide.

SUPPLY, DEMAND

Crabtree's report noted current listings were down 57 percent year over year at 279 in April. That measure of supply fell almost 16 percent from the month before.

Demand as measured by closed sales of existing Bakersfield homes was up 54 percent from a year earlier at 658 — and sales of new homes were up about 119 percent year over year at 140; median prices in the category were up about 7 percent from April 2020.

The California Association of Realtors reported a record-high median sales price in April as what it called heated market conditions increase a shortage of homes across the state.

Sales came in at their fastest pace ever that month — at seven days, close to half the time recorded a year earlier — producing the highest year-over-year price gain ever in April: 65 percent.

CAUTIONARY NOTE

That was enough to prompt a note of concern from CAR Vice President and Chief Economist Jordan Levine.

"Not only do skyrocketing home prices threaten already-low homeownership levels and make it harder for those who don't already have a home to purchase one, it also brings to question the sustainability of this market cycle," he stated in a news release.

"As vaccination rates increase and the state reopens fully," he continued, "higher home prices will hopefully entice prospective sellers who have held off putting their homes on the market during the pandemic to feel more comfortable listing their homes for sale, which would alleviate pressure on home prices."

CAR reported the state's major regions all saw sharp sales gains in April, including the Central Valley's 40 percent. Almost all counties saw month-over-month price increases, too, and all experienced year-over year gains, as well as a drop in listings from April 2020.

Kern County's median sales price that month was estimated at 315,000, an increase of less than 2 percent from March but a jump of 16 percent from April 2020.