Buying a home remains relatively affordable in Bakersfield, but renting an apartment in the city just got less so.
A new national ranking put Bakersfield second on a list of small metropolitan areas with the highest rent increases during the last three months of 2019. Property-management software firm RealPage Inc. says Bakersfield rents rose by 7.5 percent, almost triple the nationwide mark of 2.8 percent.
Local rental prices remain very low in comparison with most of the rest of the state and the reported fourth-quarter rent hikes follow an extended period of modest increases in Bakersfield. But a jump wasn't surprising given the city's tight apartment market and statewide rent-control measures that took effect Jan. 1.
Nevertheless, multifamily-housing specialist Marc Thurston with Bakersfield's ASU Commercial sees RealPage's 7.5 percent estimate as high. Although his own data on local fourth-quarter rents weren't immediately available, he said he'd be stunned to see such a large increase, considering he's unaware of year-over-year jumps anywhere that high in the past.
It's worth noting that, starting this year, rent-control measures passed by the state Legislature will limit rent hikes in California to 5 percent per year plus cost-of-living increases. Thurston suggested some local apartment owners may have chosen to raise rents ahead of the new law taking effect.
"I know many of the professionally managed companies were planning on raising rents in the 3rd and 4th quarter last year to keep pace with the market and not fall behind," Thurston said by email Thursday morning.
"Fortunately or unfortunately," he continued, "most of the smaller owners / management companies were either not aware of the new rent control law and its impact or they didn’t care."
Amid all of this, apartment builders are looking to put new product on the market in Bakersfield, which is experiencing historically low vacancies and is widely viewed as lacking market-rate rental housing because of high development costs.
Aside from the 53-unit, upscale townhome project Sage Equities plans to break ground on before summer at Q and 18th streets, Fuller Apartment Homes began construction last month on a 312-unit, one- and two-bedroom apartment project southeast of Stockdale Highway and Heath Road.
Park West at Stockdale River Ranch, as the project is known, is a partnership with Bolthouse Properties emphasizing community-style living and high-quality amenities. Fuller is the same company that developed the 224-unit apartment complex called Park Square at Seven Oaks, just west of Buena Vista Road south of White Lane.
Just where in the world Bakersfield's tenants are coming from was the subject of a news release Thursday by online rental site Apartment List.
It noted that about 40 percent of Bakersfield renters are looking to move outside the area, while a larger number — 45 percent of people seeking a place to rent locally — are from outside the area.
Riverside residents make up the largest component of people hoping to find an apartment in Bakersfield, at 26 percent of would-be local tenants, according to Apartment List. Los Angeles (24 percent) was the next-biggest source of possible future renters, followed by Sacramento (6 percent).
The picture is quite different in Bakersfield's single-family home market, where appraiser and longtime housing observer Gary Crabtree says supply and demand were both down year over year in November as homeowners "shelter in place" rather than plan a move.
Supply as measured by existing homes listed for sale were down almost a quarter from a year before, he noted, while closed sales declined by close to 6 percent during the same period. That kind of imbalance would generally be expected to nudge prices upward, though as Crabtree observed, growth in the somewhat more expensive new construction market is making up some of the difference.
Crabtree said in a written summary that the result has been continuing strong affordability — slightly more than half of city residents can afford their own house, which is far better than the rest of the state as a whole — and an annualized price-appreciation rate of nearly 5 percent.