Bakersfield, California sits in the middle of the inland empire, overshadowed by “hotter” coastal cities like Los Angeles, San Diego, and San Francisco. Those who live outside of the state may not have even heard of it except as a place their produce passed through. Bakersfield sits at the southern end of the San Joaquin Valley. Bakersfield is a city in Kern County, California, United States. It is the county seat and largest city of Kern County.
Bakersfield itself is home to around 400,000 people. This makes Bakersfield the ninth-largest city in California. The Bakersfield metro area is home to nearly 900,000 people. It has seen roughly one percent growth per year since 2010. With the year-over-year rise in Bakersfield home prices, it stands in the top 10% nationally for real estate appreciation. Bakersfield real estate has appreciated 150.36 percent over the last decade, equating to an annual appreciation rate of 9.61 percent on average.
In the last twelve months, Bakersfield's appreciation rates have remained among the highest in the country, at 23.78 percent, which is higher than the appreciation rates in 88.41 percent of the country's cities and towns, according to NeighborhoodScout. Short-term real estate investors have found success in Bakersfield over the last twelve months. Bakersfield appreciation rates were 8.40 percent in the most recent quarter, equating to an annual appreciation rate of 38.05 percent.
Local real estate professionals have criticized a recent national research warning of housing market problems in Bakersfield, claiming the study's concerns are grossly exaggerated and that, if anything, circumstances are steady, if not improving. Bakersfield was ranked 36th in a report released Oct. 22 by personal finance website GOBankingRates, “50 Housing Markets That Are Turning Ugly,” based on risk variables like price appreciation, foreclosure rates, and marketing delays.
Bakersfield Housing Market Trends 2022
As per the real estate company named Redfin, the Bakersfield housing market is very competitive. In May 2022, Bakersfield home prices were up 19.5% compared to last year, selling for a median price of $389K. On average, homes in Bakersfield sell after 10 days on the market compared to 9 days last year. There were 492 homes sold in May this year, down from 579 last year.
- Many homes get multiple offers, some with waived contingencies.
- The average homes sell for about 2% above the list price and go pending in around 10 days.
Hot homes can sell for about 6% above the list price and go pending in around 5 days.
According to the California Association of Realtors' latest report for the Kern County housing market;
- Existing SFR Home Sales in May were 584, down 11.8% YTY and 3.4% MTM.
- The year-to-date sales are down 9.8% from last year.
- The Existing SFR Median Price was $385,000, up 21.5% year-over-year.
- Total Active Listings in the month were 822, a +68.1% increase from last year.
- Median Days on Market was 8.
- The Sale-to-List Price ratio was 101%.
- % of Active Listings with Reduced Prices was 29.4%.
- The unsold inventory equals 2.1 months, an increase from last May (1.7 months).
These are the latest trends in the Bakersfield housing market;
- Existing SFR Home Sales in Bakersfield in May were 528, down 13.2% year-over-year.
- The Existing SFR Median Price was $387,000, up 21.0% year-over-year.
- Total Active Listings in the month were 747, a +48.5% growth from last year.
- Median Days on Market was 7 in Bakersfield.
- The Sale-to-List Price ratio was 101.4%.
- % of Active Listings with Reduced Prices was 28.8%.
Homebuyer’s Guide to Bakersfield, CA
The supply is very tight and with all of these factors considered, at this time, it is unlikely that the Bakersfield housing market will see a price decline in 2022. Here's important data published by the California Association of Realtors for buyers looking to buy a home in Bakersfield. The interest rate in May was 5.23%, much higher than last May when it was 2.96%.
- The median price of a one-bedroom house is $185K. If a buyer puts 20% down, the monthly payment = $1,028
- The median price of a two-bedroom house is $215K. If a buyer puts 20% down, the monthly payment = $1,194
- The median price of a three-bedroom house is $350K. If a buyer puts 20% down, the monthly payment = $1,945
- The median price of a four-bedroom house is $527K. If a buyer puts 20% down, the monthly payment = $2,929
Bakersfield Rental Market Trends
The rents are also on the rise in the Bakersfield housing market. As of June 30, 2022, the average rent for a 1-bedroom apartment in Bakersfield, CA is $1,060. This is a 13% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Bakersfield decreased by -3% to $925. The average rent for a 1-bedroom apartment increased by 1% to $1,060, and the average rent for a 2-bedroom apartment remained flat.
- The average rent for a 2-bedroom apartment in Bakersfield, CA is currently $1,348, up 23% compared to the previous year.
- The average rent for a 3-bedroom apartment in Bakersfield, CA is currently $1,900, up 27% compared to the previous year.
- The average rent for a 4-bedroom apartment in Bakersfield, CA is currently $2,500, up 28% compared to the previous year.
Bakersfield Real Estate Market Forecast 2022-2023
According to Zillow, the Bakersfield real estate market is very hot. The typical home value in Bakersfield is $342,791. From 2019 to 2020, home prices were up by almost 11%. Last year has been sizzling hot for sellers as the Bakersfield home values were up by 22.6%.
- The typical home value of homes in Bakersfield Metro is $337,500 as of May 2022.
- The Bakersfield–Delano Metropolitan Statistical Area, which includes all of Kern County.
- Bakersfield Metro home values have gone up 22% over the past year.
- The Bakersfield MSA housing market forecast ending with May 2033 is positive.
- Zillow predicts they will rise 10.3% by May of next year.
- If this forecast is correct, Bakersfield home prices will be higher in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
- The typical value of homes in Kern County is $337,500, up 22% over the past year.
Here are some of the best neighborhoods in Bakersfield to invest in real estate because they have the highest appreciation rates since 2000 (List by Neigborhoodscout.com).
- Oleander Sunset East
- Hughes Ln / Fairview Rd
- East Bakersfield South
- Wible Orchard Northwest
- Chester W Nimitz St / Fairview Rd
- University Ave / Vanderbilt Dr
- El Adobe / Fuller Acres
Bakersfield Real Estate Investment Overview 2022
Is it worth buying a house in Bakersfield, CA? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Bakersfield is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Bakersfield housing market forecast for answers on why to put resources into this market.
Although, this article alone is not a comprehensive source to make a final investment decision for Bakersfield we have collected ten evidence-based positive things for those who are keen to invest in Bakersfield real estate. Investing in Bakersfield real estate will fetch you good returns in the long term as the home prices in Bakersfield have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Bakersfield real estate market which can help investors who are keen to buy an investment property in this city.
How Affordable It Is by Californian Standards
Affordability is relative. The median home in the Bakersfield housing market is 340,000 dollars. It is this relatively affordable real estate market that makes Bakersfield's real estate investment feasible. Locals are moving here so they can afford to save for the future or pay off debt while still living in a single-family homes. This partially explains why the Bakersfield cost of living is 109 while the state average is 168. For investors, the ability to buy a set of Bakersfield real estate investment properties for the cost of the average home in California is a point in favor of the area.
The Bakersfield housing market had a foreclosure rate triple that of the national average at the height of the 2007 housing bust. More than one in a hundred homes in the area were in foreclosure at that time. The foreclosure rate in Bakersfield now hovers at around one out of every thousand homes. There are areas like the 93313 zip code where the foreclosure rate is much higher, though. Furthermore, you periodically find farm owners who want to retire; then you can buy farmland for development. This gives you the ideal Bakersfield real estate investment opportunity if you want to build a residential subdivision or commercial property.
The Demographic Momentum
A housing market may grow because people are moving there, or it may grow because of natural population growth. While Bakersfield is seeing some in-migration, they’re also seeing slow and steady population growth. That’s despite the state of California on average losing people because policies have depressed wages and made the cost of housing skyrocket. That’s why the Bakersfield area has a median age of roughly 30. There are many families here that will stay here, increasing demand for Bakersfield real estate investment properties.
And the young adults who are already here are likely to stay because of the job market. This will keep the Bakersfield housing market at least growing slowly for the next few years. Wallethub ranked the Bakersfield housing market similarly on quality of life and affordability. In contrast, many “affordable” housing markets have low rents and property prices because no one wants to live there. Compare this to San Francisco’s million-dollar condos while they have to hose poop off the streets, and the Bakersfield real estate market looks like paradise compared to the alternatives.
The Job Market
Bakersfield has an unemployment rate of around five percent. While that’s not great by Californian standards, it is a deal for those in the surrounding area. Bakersfield came in 170 out of more than 250 cities in the state. People are moving here from across the declining agricultural region to find decent-paying jobs. The median wage of more than 56,000 dollars a year is reason enough to come for many.
The Large Bakersfield Rental Market
The Bakersfield area has several features that guarantee a large rental population. One is a prevailing wage that puts the ownership of a home in the Bakersfield housing market out of reach. The seasonal agricultural work leaves many others unable to commit to owning a home. And that’s on top of the colleges and universities in the Bakersfield area. Don’t expect the Bakersfield housing market fundamentals in this regard to change.
It is unfair that the state’s politics are dominated by San Francisco and Los Angeles. Both of these cities are incredibly tenant-friendly, though that would give any property investor pause. However, the whole state is not like that. For example, a Bakersfield real estate investment property owner will find a much friendlier climate. Bakersfield doesn’t have rent control laws. Eviction isn’t as easy as a landlord-friendly state, but it is easier than if you were evicting a lease-breaker in Los Angeles.
8. Market Stability
The Inland Valley saw property values crater ten years ago in response to the Great Recession/housing crisis. The environmentalists nearly cutting off the supply of water to an agricultural area made matters worse. While the regulatory stranglehold hasn’t eased, farmers have shifted crops. More importantly, the job market is diversifying. The housing market has stabilized, and it isn’t going to experience rapid rises or falls compared to “hot” housing markets.
This is why the Bakersfield real estate market has seen appreciation in line with population growth, not the rapid rise of properties on the coast that could collapse once people decide it isn’t worth living there. The hottest areas in the Bakersfield real estate market were up 5 percent year over year. That’s nothing compared to the double-digit growth in fast-growing areas, but you won’t be left holding at the top of the roller coaster, either.
The Reasonable Property Tax Rate
The average property tax bill in Kern County is 1.1 percent. That’s a little higher than the 0.8 percent California state average. However, you can buy two to three times as many houses in Bakersfield, California as you could in L.A., and four times as many Bakersfield real estate investment properties as you could in San Jose. The result is a much lower overall property tax bill on Bakersfield real estate, averaging less than 3000 dollars a year.
Bakersfield is developing and diversifying, maturing beyond the farming hinterland that led it to be written off as a California backwater. Its stabilized real estate market won’t offer skyrocketing property valuations or equally shocking rental rates, but that makes it a good choice for investors seeking solid, steady returns.
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Bakersfield, CA is your ability to find great real estate investments in that area.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
Purchasing an investment property requires a lot of study, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and taking the help of a real estate investment counselor. The other best place to invest in real estate is Fresno, CA. Fresno is sometimes seen as the boring middle child in a famous family. It is overshadowed by Los Angeles, San Francisco, and San Jose. Yet it is free of its many problems, too, while remaining solid and stable. That’s why you can’t afford to ignore the Fresno area.
The median rent in the Fresno area is 1600 dollars a month, though you can rent a single-family home in the Fresno area for much more than this. A side benefit of the relatively affordable real estate market is that you’ll pay less in real estate taxes than you would in a “hotter” market. That’s why the theoretically lower property tax rate in LA doesn’t matter, since the average home costs twice as much as one in the Fresno housing market.
Let us know which real estate markets you consider best for real estate investing!
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Housing Market Data, Trends & Statistics
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