The current state of the Bakersfield housing market suggests a balance between buyer and seller advantages. With homes selling close to their listed prices and a competitive environment driven by quick sales and multiple offers, sellers can find favorable conditions. However, the presence of price drops and a significant portion of buyers looking to move within the metropolitan area provides opportunities for buyers to explore their options.
Table of Contents
Current Bakersfield Housing Market Trends
How is the Housing Market Doing Today?
The Bakersfield housing market, as of December 2023, reflects a dynamic landscape with notable changes compared to the previous year. As per the real estate company named Redfin, home prices in Bakersfield have experienced a 2.0% increase, reaching a median price of $385K. This growth, although moderate, indicates a positive trend in the local real estate market.
On average, homes in Bakersfield are selling after 33 days on the market, a slight improvement from the 34 days reported last year. Despite a marginal decrease in the number of homes sold, with 268 sold in December compared to 311 the previous year, the market remains active and responsive.
How Competitive is the Bakersfield Housing Market?
Bakersfield's housing market is characterized by competitiveness, as indicated by the median sale price being 3% lower than the national average. Homes in this region are sought after, with a remarkable 31 days on the market, showcasing a swift sales process.
The competitive nature is further emphasized by the fact that many homes receive multiple offers, some with waived contingencies. The average homes sell for about 1% below the list price, attesting to the demand-driven pricing dynamics in Bakersfield.
Additionally, hot homes, defined by their ability to sell for around list price and go pending in around 10 days, contribute to the overall competitive atmosphere in the market.
Are There Enough Homes for Sale in Bakersfield to Meet Buyer Demand?
While the Bakersfield housing market is robust and competitive, there are factors indicating a balance between supply and demand. The sale-to-list price ratio stands at 99.1%, showing a slight increase of 0.7 points year-over-year. This suggests that homes are generally selling close to their listed prices, indicating a healthy demand from buyers.
However, it's crucial to note that 19.9% of homes experienced price drops, albeit a decrease of 0.72 points year-over-year. This highlights a segment of the market where adjustments are made to accommodate buyer expectations, potentially indicating some flexibility in pricing strategies.
What is the Future Market Outlook for Bakersfield?
The migration and relocation trends in Bakersfield provide insights into the future market outlook. In the period from November '23 to January '24, 31% of homebuyers explored moving out of Bakersfield, while 69% preferred to stay within the metropolitan area. These trends may influence the future supply and demand dynamics, shaping the market in the coming months.
Furthermore, understanding where people are moving from can offer valuable predictions. Nationally, 0.52% of homebuyers sought to move into Bakersfield from outside metros. Notably, Los Angeles homebuyers expressed the highest interest in moving to Bakersfield, followed by San Francisco and Dallas, indicating potential sources of future demand.
Bakersfield Housing Market Forecast for 2024 and 2025
Average Home Price in Bakersfield CA
According to Zillow, the Bakersfield housing market is currently experiencing a notable upswing, with the average home value standing at $376,023, marking a 4.0% increase over the past year. Homes in Bakersfield are going to pending status swiftly, with an average of 20 days on the market as of January 31, 2024.
Key Housing Metrics Explained:
- For Sale Inventory (January 31, 2024): The city boasts a 791 strong inventory of homes for sale, indicating a diverse range of options for potential buyers.
- New Listings (January 31, 2024): With 261 new listings in January, the market is dynamic and continually evolving.
- Median Sale to List Ratio (December 31, 2023): The 1.000 ratio suggests a balanced market where homes are generally selling close to their listed prices.
- Median Sale Price (December 31, 2023): Homebuyers in Bakersfield are looking at a median sale price of $358,333.
- Median List Price (January 31, 2024): As of January 31, 2024, the median list price has reached $403,260, reflecting an active and competitive market.
- Percent of Sales Over/Under List Price (December 31, 2023): Notably, 36.0% of sales went over list price, while 41.0% went under list price in December 2023, showcasing the diverse negotiation landscape in the market.
Bakersfield MSA Housing Market Forecast
In the broader context, the Metropolitan Statistical Area (MSA) of Bakersfield, CA is anticipated to see continued growth. According to the forecast, as of January 31, 2024, the MSA's housing market is predicted to increase by 0.3% by February 29, 2024, and further rise by 1.3% by April 30, 2024. Looking ahead, a more significant uptick is projected, with an estimated 5.2% increase by January 31, 2025.
The term MSA refers to the Metropolitan Statistical Area, and in the case of Bakersfield, it encompasses the geographical region, including counties and communities, influenced by the economic and social interactions within the city. Bakersfield's MSA is situated in California and includes various counties, contributing to the overall size and complexity of its housing market.
The housing market within Bakersfield's MSA is sizable and diverse, offering a range of properties that cater to different preferences and needs. The forecast indicates positive momentum, making it an intriguing market for both buyers and sellers seeking opportunities in the real estate landscape.
Are Home Prices Dropping in Bakersfield?
Contrary to a downward trend, Bakersfield's housing market is witnessing steady growth. The average home value has increased by 4.0% over the past year, reaching $376,023 as of January 31, 2024. This positive trajectory indicates that home prices are not dropping but rather gaining momentum.
Currently, the Bakersfield housing market appears to lean towards a seller's market. With a limited inventory of 791 homes for sale and a median list price of $403,260 as of January 31, 2024, sellers have the advantage in negotiations. The 36.0% of sales going over list price in December 2023 further supports the notion that sellers are in a favorable position.
Will the Bakersfield Housing Market Crash?
Based on the current data and market trends, there is no imminent sign of a housing market crash in Bakersfield. The balanced median sale to list ratio of 1.000 as of December 31, 2023, suggests stability, and the forecast predicts continued growth in the coming months. However, it's essential to monitor economic indicators and external factors that could influence the real estate landscape.
Is Now a Good Time to Buy a House in Bakersfield?
For potential homebuyers, the current scenario in Bakersfield presents both opportunities and challenges. While the market favors sellers, the overall growth and the anticipated 5.2% increase in the housing market forecast by January 31, 2025, suggest that now could be a strategic time to invest. However, individual circumstances and preferences should be considered, and consulting with a real estate professional is recommended for personalized advice.
Bakersfield Real Estate Investment Overview
Bakersfield Home Appreciation: A Decade of Above-Average Growth
Over the last ten years, Bakersfield has experienced a noteworthy trend in home appreciation rates, surpassing the national average. According to data from NeighborhoodScout, the cumulative appreciation rate for homes in Bakersfield during this period stands at an impressive 110.25%. This places Bakersfield's real estate market in the top 30% nationwide in terms of overall appreciation.
Breaking down the figures, Bakersfield has seen an annual average house appreciation rate of 7.71% over the past decade. This consistent and above-average growth reflects the city's robust real estate market, making it an attractive destination for homeowners and investors alike.
Population Growth and Trends
Bakersfield, with its strategic location in California's Central Valley, has experienced consistent population growth over the years. The city's population trends indicate a steady increase, which is a positive sign for real estate investors seeking areas with a potential demand for housing.
- Population Dynamics: The city's diverse population contributes to a dynamic real estate market, catering to various housing preferences.
- Migration Patterns: Analyzing migration patterns reveals a consistent influx of residents, creating a stable demand for housing options.
Economy and Jobs
The economic landscape of Bakersfield is a crucial factor for real estate investors. Understanding the city's economy and job market is pivotal for making informed investment decisions.
- Job Opportunities: Bakersfield's economy is anchored in industries like agriculture, oil, and manufacturing, providing a diverse range of job opportunities.
- Employment Stability: The stability of key industries contributes to a resilient job market, fostering economic stability that positively impacts the real estate sector.
Livability and Other Factors
Livability is a key consideration for both residents and investors. Factors such as amenities, education, and safety contribute to the overall appeal of the Bakersfield real estate market.
- Amenities: Bakersfield boasts a range of amenities, including parks, cultural attractions, and recreational facilities, enhancing the overall quality of life for residents.
- Educational Institutions: The presence of reputable educational institutions is a crucial factor, attracting families and students, positively influencing the demand for housing.
- Safety Measures: A focus on safety and community well-being adds to the city's appeal, making it an attractive destination for potential real estate investors.
- Affordability: The cost of living in Bakersfield is significantly lower than the California average, attracting businesses and residents alike.
Rental Property Market Size and Growth
For investors interested in rental properties, analyzing the market size and growth potential is essential to maximize returns on investment. The city's housing landscape is diverse, catering to both homeowners and renters, with 59.27% owning their residences and 40.73% opting for rental accommodations.
- Market Size: Bakersfield's rental property market has shown substantial growth, with a diverse range of rental options catering to various tenant demographics.
- Rental Demand: Factors like job opportunities and population growth contribute to a sustained demand for rental properties, creating a lucrative market for investors.
- Single-family Detached Homes: When it comes to housing types, single-family detached homes dominate the Bakersfield real estate scene, constituting a significant 71.35% of the city's housing units. Other prevalent housing options include large apartment complexes or high-rise apartments (13.40%), duplexes, homes converted to apartments, or other small apartment buildings (9.06%), and a small percentage of row houses and other attached homes (3.39%).
Other Factors Related to Real Estate Investing
Several additional factors play a role in the attractiveness of the Bakersfield real estate market for investors.
- Infrastructure Development: Ongoing and planned infrastructure projects can positively impact property values, making it a promising prospect for long-term investors.
- Market Affordability: Bakersfield's real estate market offers affordability compared to some other California cities, making it an enticing option for investors looking for reasonable entry points.
In summary, the Bakersfield real estate market presents a compelling opportunity for investors. With a growing population, diverse economy, and favorable livability factors, the city offers a robust environment for real estate growth and profitability.
References:
- https://www.zillow.com/fresno-ca/home-values
- https://www.redfin.com/city/6904/CA/Fresno/housing-market
- https://www.macrotrends.net/cities/22927/bakersfield/population
- https://www.neighborhoodscout.com/ca/fresno/real-estate