In the list of numbers summing up Bakersfield's single-family home market last month, one figure better than any other explains why buyers are bidding up prices lately.

It's a measure of supply and demand: how long, at the current rate of purchasing, it would take to go through the full inventory of existing homes listed for sale. This "unsold inventory" gauge held at 1½ months in July 2019.

A year later it stood at just three weeks, according to a report by Bakersfield's Affiliated Appraisers.

Several factors are heating up Bakersfield's home market lately, from low interest rates to demand from people emigrating from higher-priced areas. But an aspect that sometimes gets overlooked is the unusually low supply of existing homes for sale.

Frank St. Clair said he's never seen local sales inventory so low. The Bakersfield real estate professional said the situation only exasperates already tight conditions.

"There's not much really to show" potential homebuyers, he said. "It's pushing up prices."

A year ago last month there were 973 existing single-family homes for sale in Bakersfield. But by last month it was only about half as many: 499.

Sales are also up modestly but no other year-over-year market comparisons were nearly as drastic as the drop in supply.

GOOD FOR SELLERS

Without question the limited inventory has benefited sellers. Median sale prices for existing homes rose 6.6 percent between July 2019 and July 2020, when Affiliated says the median hit $280,000.

The rest of the state is in a similar situation. The California Association of Realtors reported all regions of the state saw listings fall more than 30 percent in July as compared with a year earlier. California's median sale prices, meanwhile, rose a little less than 10 percent to hit $666,320.

Local real estate agencies say the result locally has been multiple offers at listings between $200,000 and $400,000. Within days after a moderately priced home goes on the market, they say, a buyer can expect to have a strong offer in hand.

'SIMILAR TO 2005'

Bakersfield real estate agent Sheeza Gordon said a low number in the unsold-inventory column is a sure sign of market strength.

"i think it’s sort of a boom similar to 2005," she said.

Gordon's son William, who works with her as part of The Gordon Team at Watson Realty, said several properties he's helped market recently fetched multiple offers on the way to sale prices significantly above their list prices.

He recalled an "ugly duckling" home at 3902 Mont Blanc Terrace off Fairfax Road just south of Highway 178. It was listed at $295,000. Though somewhat quirky with some elements in bad shape, the property ultimately got nine offers and is now in escrow at an agreed price of $338,000.

WHAT'S SELLING

The owner of Affiliated Appraisers, Gary Crabtree, said buyers' preferred price is another important aspect of local home sales. The highest price range in demand lately, where 40 percent of sales were in July, is between $200,000 and $300,000, he said.

Widening that window, he said two-thirds of Bakersfield's July home sales fell between $200,000 and $400,000. By comparison, Crabtree reported that only 7 percent of the market closed in the $500,000 to $700,000 range last month.

Crabtree said another aspect of the local market — new-home construction — continues at strong pace. But he noted builders trying to scale down their prices to deliver entry-level homes, where demand is strongest, typically face limitations from fees and material costs that drive up costs.

New-home sales in July numbered just 94, which was about one-seventh the existing-home total. The median sale price of a new home that month was $319,780, or 14 percent higher than the existing-home median.

READY BUYERS

The CEO of the Bakersfield Association of Realtors, Kim Huckaby, views low inventory as a function of strong sales activity.

Consumers are taking advantage of historically low interest rates, she noted, and they're attracted to Kern County's relatively high housing affordability as compared with other parts of the state.

"We will still need more inventory locally to keep pace with the demand," Huckaby said by email. "Luckily, we still have builders building and the land to build on."

Follow John Cox on Twitter: @TheThirdGraf

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(9) comments

gketchum

Good article highlighting Bakersfield as a good choice for buyers looking for affordable housing. One thing not mentioned as a driver of low inventory is Covid-19 restricting the number of sellers willing to list and have strangers entering thier home. It is a factor that hopefully soon will come to an end.

DogPark

Timely article on more layers of interest groups and red tape. I get regulation and oversight are certainly valuable, but at what point is everyone hamstrung and unable to get anything done in a timely manner???

https://www.bakersfield.com/news/court-allows-feds-to-thin-forest-near-frazier-park/article_184297a0-e726-11ea-b604-bb59d3cccc97.html

DogPark

Lack of inventory is largely a result of onerous and expensive new construction permitting/red tape from the great state we live in....which 'wants more housing".

Gary Crabtree

Your'e right. Impact fees are choking the builder to death. They are trying to add an additional $4.05/sf to the school fee. If they succeed, the permit and impact fees for an 1,800 sf house will be close to $40,000.

Meeshka

Ew who'd want to live in Bakersfield. I recommend living in a van down by the river. Prettier, friendlier, quieter, better air and much safer.

Moardeeb

When one is imprisoned, it matters not if outside your door is paradise or a sinkhole. Hence, the attraction of Bakersfield, the stinkhole.

Boris25

Mostdumb, if you hate it so much , why not leave? If you did the average IQ of Bakersfield would increase, unfortunately wherever you moved to, the average IQ would decrease. Anyway, why are you writing about home prices? You rent a "one room luxurious penthouse apartment" .

The new comment

You need to be evaluated for mental illness.

Lilyrose

It's like going from giving it away to giving it away for $30.. hummmm......can we say any home no matter size which sells for less than $400,000 is ridiculous.

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