Stability returns to Bakersfield home market

Jan. 29—Bakersfield's single-family home prices found a toehold last month, suggesting lower mortgage interest rates may have helped rebalance the market.

New data shows the city's existing-home sales price median held steady in December at $370,000 as a surge in demand met a drop in supply — opposite the trend over the previous 12 months. The median for new homes edged upward to reach $435,000 despite a small dip in sales.

Observers were optimistic December's equilibrium will hold.

"The Bakersfield market has now stabilized" with last month's existing median landing percent higher than a year before, appraiser Gary Crabtree said in a report he released late last week.

Michelle Valverde, the new Bakersfield Association of Realtors president, pointed to statewide trends telling her that, in spite of the challenges, "we have every reason to remain optimistic with our local housing market."

"December's uptick in sales shows buyers and sellers are gradually adapting to the new normal and shifting to a more balanced market," she said in an emailed comments.

Key indicators of local market activity headed the opposite direction in December than they did over the prior year.

Listings (supply) were down almost 23 percent from November at 626, but they ended the month 164 percent greater than a year before, Crabtree reported.

Sales of existing homes (demand) were up almost 16 percent at 375, but down more than 34 percent year over year.

New home sales (a different look at demand) slipped 3.2 percent to 91, up almost 98 percent from December 2021.

Bakersfield's affordability index rose 2 percent but ended the month 12 percent below its level a year prior.

Crabtree pegged the city's price-appreciation rate at the historically high rate of 15.4 percent. That was nevertheless down 1.1 percent from November and 1.4 percent lower than in December 2021.

Interest on a 30-year, fixed-rate mortgage slid 46 basis points in December to hit 6.47 percent — 303 basis points higher than the same month a year earlier, according to Crabtree's data.

He noted more sellers are settling for a lower price: Almost half of December's sales resulted from price concessions averaging 2.2 percent, with more than a third of those transactions allowing buyers to "buy down" their interest rate.

Crabtree saw good news in the dual trends of moderating inflation and sellers softening their price demands.

"The negative side," he said, "is that sellers are receiving a net less (money) for their properties."

Valverde said the overall leveling out of the market will help homebuyers with a glass-half-full outlook.

Even though demand is down statewide with continuing affordability challenges, she noted, the decline in mortgage interest rates and slowing home appreciation "may help to bring buyers off the sidelines."

Valverde pointed to an uptick in demand in California's existing-home market last month that snapped a three-month slide in sales volume.

Although the state's median sales price was down month over month and year over year, she noted, prices haven't fallen steeply, largely because the market remains tight.

Her prediction was that affordability will improve statewide over the near term while prices and interest rates decrease.

"At the local level we continue to see the same encouraging trends that are being seen across the state and nation," she wrote.