Following a volatile start to the year, Bakersfield’s single-family home market returned last month to what a prominent observer termed normal conditions as new data showed the city’s median sale price for an existing house sliding 2.4 percent to hit $370,000, or 1.2 percent less than a year earlier amid higher interest rates.
The report by local appraiser Gary Crabtree said the median price for a newly built home in March fell more steeply — it was down 6.2 percent month over month at $446,500 — to settle 5.9 percent below its level a year before.
March’s declines, which followed an unexpected 5.3 percent surge in the existing-home median in February, came amid a substantial decline in supply (listings declined almost 23 percent from February) and big jumps in demand as the sales volume of existing homes in the city rose more than 41 percent and purchases of new construction soared 85 percent.
Crabtree said the local market “returned to normal” in March as interest rates relaxed, supply remained tight and buyers seemed to be capitalizing on a situation in which consumer prices are expected to keep rising, potentially shutting buyers out of the market because of continued pressure on the Federal Reserve to raise interest rates.
As for new construction’s median price change, Crabtree called the decline “attributable to the resumption of normal pricing.”
The situation in March was different at the state level, where according to the California Association of Realtors, sales volume declined about 1 percent and the median sales price was up almost 8 percent — the first increase in seven months — at $791,490.
CAR President Jennifer Branchini noted in a news release that competitiveness in the market “continues to heat up,” evidenced by faster sales and an improving sales-to list-price ratio at a time inventory is tightening.
“All signs point to a market with solid demand, which should help bolster sales through the home-buying season,” Branchini stated.
The association’s vice president and chief economist, Jordan Levine, added in the release that if interest rates stabilize in the next couple of months, “home sales should rise during the spring home-buying season, but tight inventory will prevent a rapid rebound.”
Michelle Valverde, president of the Bakersfield Association of Realtors, noted in an email Monday the national economy is losing momentum, as could be expected, because of monetary policy moves and that another interest rate hike looks likely next month. With consumer sentiment stable, she added, expect to see inventory challenges during a continuing housing shortage.
Valverde indicated she agrees with Crabtree’s assessment the local market is normalizing and that, with slower wage growth, “all point to less upward pressure on consumer prices.” She added that higher borrowing costs are starting to weigh on shoppers’ decisions to buy big-ticket items.