Compared To Florida, Bakersfield’s Still In Good Shape
The Bakersfield Californian has a report on that housing bubble. “The clouds may be breaking over Bakersfield’s gloomy winter real estate market, though the number of home sales has tumbled in recent months. About 1,380 existing houses were sold in the first three months of 2006, a 13.2 percent drop from last quarter.”
“The decline was even larger when compared to the same time last year, showing a 24.7 percent drop. The dip in sales mirrors what’s been happening throughout the state and country, local appraiser Gary Crabtree said. ‘It wasn’t like Bakersfield was the Lone Ranger,’ he said.”
“Bakersfield’s median house price also took a hit during the winter months, dropping by about 6 percent, Crabtree said.”
“But new signs of growth this spring have local real estate agents hopeful. February and March brought modest home price increases. Not everyone’s convinced, however, that Bakersfield’s current prices are here to stay. The plunge in sales and rise in the number of homes on the market should be driving prices down, said broker Robin Ablin.”
“People just haven’t been calling, Ablin said. He recently had to reduce the asking price of a well-kept house in east Bakersfield’s Hillcrest neighborhood by roughly $15,000 because only four people had looked at it since September.”
“Bakersfield’s market was long undervalued, and houses have reached a price where they should be, said agent Alice Profeta. ‘(Buyers) might as well go out there and buy now while we have a decent interest rate,’ she said.”
“An agent from Florida recently told Profeta, ‘It took longer to sell a house than it does to have a baby,’ she said. Compared to that, Bakersfield’s still in good shape.”
Pathetic shills!
Hi Ben:
Love the blog.
Just a thought=can we go back to have comments put on the blog in the order they were put on.
That way we can go straight to the bottom to see the latest comments rather than trying to figure who inserted a comment where. The way it used to be).
Just a thought-thanks for your time.
My two cents — I agree.
Agree! It’s too difficult to go through these over and over again. Even the “most recent post” feature wasn’t very helpful, IMHO.
Let’s just copy and paste what we’re referring to again, instead of these embedded posts.
I want it that way too!
Yes! Just append new comments.
“Comments on the bottom for Everyone”
No keep it the way it is .
Having a baby will probably be less painful as well.
Although not related to this story…
Anyone know how much the Unabomber payed for the land and the cabin that he lived in? Would be curious to know how much it is worth now after the bubble. lol. He was living on $1 per day. Wonder if this is still possible anywhere in America anymore.
” He was living on $1 per day. Wonder if this is still possible anywhere in America anymore. ”
Become a member of Congress
“Bakersfield’s market was long undervalued, and houses have reached a price where they should be, said agent Alice Profeta. ‘(Buyers) might as well go out there and buy now while we have a decent interest rate,’ she said.”
Yeah, half a million bucks or more for a dump - sign me up. You might as well go out there and completely throw away your financial future based on this uneducated skank’s advice. Earth to Alice - STFU
I drove around my area around Ft Lauderdale and picked up a lot of housing fliers. It was amazing, in some neighborhoods there were 6-7 houses on the same block for sale.
And the price would vary from 325k to 390k, to what appeared to be exact same houses from the outside. Are granite countertops really worth 65k?
Also some houses in areas with no sidewalks were listed for 370k, while nicer houses in nicely kept areas were listed at 350k.
The number of houses has gone up about 50% since the new year. Discrepancies in the price and rising inventory tell me that there’s no market anymore, people are just throwing random numbers out and hoping a greater fool will buy their house.
Thats it ,random numbers . I noticed in my old area in Valencia Ca. the same listings are sitting and the same houses will have a 50K to 75K difference in price yet the houses have the same improvements .
I can understand a view or a remodeled kitchen getting more ,but these houses are the same .I think there was 137 listings at this time last year and now there is 654 now in same area .
I am in Deerfield and noticing the same trends all over SFLA.
Got 4 letters from agents in the mail this past week trying to explain the new market and how price sells. They go on about all their marketing abilities. Ads for $15-25k in options or free pool on many of the new homes in Palm Beach.
There is no way I’d want to buy in this market. I used zillow to look up the houses whos fliers I picked up, and there was a slowdown in price appreciation in October, and it started going down in Feb. Looks like we’re over the hill.
Another thing I noticed is 10 year old townhouses are listed for 330k, while you can get a decent 3bed/2ba house for 320k in decents. Makes no sense.
The only thing we can do is wait, and see desperate sellers reduce prices thereby setting new comps ( much lower then the september 2005), and when the new crop of buyers see that a house is listed for 50k less than a smilar one sold for 6-8 months ago they’ll stop and think “Gee, I guess housing doesn’t always go up. If I buy now I might lose money. I’ll wait to see how this thing shakes out.”
Look up E Sidlee in Thousand Oaks, CA. There are 5 homes on the same street priced terribly high. If you expand your search a few blocks out, you’ll find a handfull more. How much do you think they’ll be when this is all over and when will it be all over? You can rent a house in the same neighborhood for $2000.
http://www.californiamoves.com/property/propertyresults.aspx?rpp=10&sort1=listprice&mls=&thumbs=1&PType=SFAM&page=1&MinBed=0&CommunityIDList=&MaxPrice=999999000&CityIDList=c2489,c3426&sortord=D&sort2=city&Zip=&Street=sidlee&sqft=0&PropSearch=0&CountyIDList=&MinPrice=0&MinBath=0
I live in Thousand Oaks too, and I would have to send a buyer to the brain surgeon (to get one) if they bought a $300K home, for $800K. Look, this is a liquidity bubble that the Fed blew, no home on Sidlee is worth that kind of dough (value). I believe that is a liquid faction area btw. I do a lot of commercial, so I am objective about residential. I am an educated R E gal.
“As long as people keep moving here, Bakersfield’s going to keep growing,” Ablin said.
No… really?
“Commuters from Southern California will keep turning to Kern County as an affordable option, said Russ Valone, president of San Diego-based MarketPointe Realty Advisors. A leveling in prices is healthy, he said.”
“Bakersfield’s market was long undervalued, and houses have reached a price where they should be, said agent Alice Profeta with Watson Realty.”
I’d like to know what’s healthy about having to commute 2+ hours each way across the Grapevine to a job in LA to be able to afford a house in Bakersfield now. I wonder if this man really understands the drive that he is talking about. And HOW can prices levelling off at $300K median catboxe$ in a place where most people make $10/hr. be healthy?!
That Grapevine drive wears out car really fast . Spending 4 to 5 hours on the road per day for a job commute is crazy . Now with gas prices going up I wonder how Bakersfield will do.This is getting crazy how far people are driving to jobs just to get affordable housing that isn’t even worth the lower prices .,(around 300K).
it’s 1 hour to the 14/5 junction, and possibly 1.5 into dtla depending on conditions.
2.5 hrs potentially each way. my commute is 7 minutes each way.
8 if i miss the light
Mine too. I live less than a mile from work right now. When I lived in Chicago I lived 1-2 miles from work, and then I decided I wanted to live downtown which was 30 miles from work. I lasted 10 months, and moved back to 2 miles from work. It wasn’t just 2-3 hours lost every day that bothered me, but it was sitting in stop and go traffic that I couldn’t take anymore.
““Bakersfield’s market was long undervalued, and houses have reached a price where they should be, said agent Alice Profeta. ‘(Buyers) might as well go out there and buy now while we have a decent interest rate,’ she said.”
Another quote for the realtor’s wall of shame…
ot - phoenix zip reporting in at 43,502
I had April 22 pegged at 43922…not far off. That’s damn scary.
50K on 6/4…
“might as well go out there and buy now while we have a decent interest rate”
Well, I was gonna wait, but if you put it that way…
Alice is going to have to work on her sales pitch for a down market.
“Commuters from Southern California will keep turning to Kern County as an affordable option,” said Russ Valone, president of San Diego-based MarketPointe Realty Advisors.
So what’s next for buyers seeking an affordable home? Death Valley?
Robert, that’s just silly. They aren’t selling homes in the National Park. The real gem is Trona. I should buy a couple of the boarded-up homes there while rates are low. I get blown away by a town that has that small of a population with that many boarded up houses and churches. It’s like a Twilight Zone set come to life.
>It’s like a Twilight Zone set come to life
True dat. Chemical mining town in the middle of the dessert off a pretty wicked grade…and the vibe going through the town is a bit spooky.
Wow, thanks for the pointer. The Trona story is a strange one that I had never heard of before. There is some interesting information and some good photos that I enjoyed taking in here:
http://www.polarinertia.com/may04/trona01.htm
All the flippers belong in TRONA . I bet someone could market that place and the flippers would buy .
man, inventory doesn’t stand a chance. more people are putting their homes up for sale and at the same time people aren’t buying as much. talk about a double whammy.
Commuting is going to take its toll with gas prices over $3.00 per gallon and climbing. How much money will be left for mortgages.
If this continues inflation will rear its ugly head and bingo goes the housing market . FAST! Any one remember Paul Volker the Fed Chiefback in the 1980’s. Well ,he helped crack the oil market and bring stabillity to the economy.
What people don’t understand about Bakersfield is that many in LA or SF-SV have moved their families there and share units in LA or SF-SV with other like fathers during the work week and then head home on the weekend. A hundred thou house in 2000 would now cost you $400 thou and up and at Bakersfield wages is not a good deal.
A tale of Los Angeles flippers, from Sunday’s Los Angeles Times:
“They had a plan, then reality intruded”
http://tinyurl.com/zfzc3
“1,900-square-foot home that seemed like a good-enough deal at $425,000…the plan was to spend $60,000 fixing up the house, then sell it in two months for about $650,000.”
$425K purchase price + 60K improvements = $485K, NOT $650K. With that kind of mark-up, HGTV’s “Designed to Sell” would be impressed.
“But as the renovation went forward, the budget crept up to $67,000, mainly because the kitchen and bathrooms cost more than expected. The kitchen got a luxury makeover with oak cabinets, some with frosted glass doors, plus brushed aluminum hardware and granite counters.”
This is called “losing sight of what you are trying to accomplish”. Unless all of the other houses in the area are gussyed-up in the same way, the only reason I can see to upgrading an “investment” in this way is to show off for your friends.
What ever happened to “eyes on the prize”?
It gets better…
“Haughey, who said he’s conservative by nature, had based his financial projections on a sales price of $650,000, but he would agree to a listing price up to $675,000. The others, though, were so impressed with the beauty of the remodel that they wanted to go higher — $725,000.”
The others, though, were so impressed with the beauty of the remodel…so impressed with the beauty of the remodel…IMPRESSED WITH THE BEAUTY OF THE REMODEL…
AAAAaaaaaaarrrrrrrgggggggggghhhhhhhh!
One more time…EYES ON THE PRIZE! Sheesh!
Maybe it’s just me, but how does one wrap their mind around spending 67k for rehabbing a house. I would have a seizure if I spent more than 10k rehabbing a 1900 sqft house for resale. Hell I’ve rehabbed a 5 unit apartment complex that was stripped down to the boards for inside and out for 30k. Too many rookies in the water.
Reminds me of a flipper I’m getting ready too take advantage of for being stupid. Buys a property for 800k puts 200k in it 2 yrs ago and feels thats worth a 2 millon tack on the price. Wonder how he’s going to feel about my 1.4 offer LOL.
Why offer 1.4? Wait and you can get it at $800,000. If he sells a property to you for 1.4 that he has 1. in it near the top of this market, who is stupid? It doesn’t sound like you understand how serious this mania may become.
LOL. My thoughts exactly. You crow about taking advantage of a flipper’s stupidity by offering “only” $1.4 mil — I’m guessing that two years down the road, when it’s worth about half what you paid, you won’t be feeling quite so smug.
LOL It doesn’t matter too me if it goes down 1/2 of what I paid I doubt that will happen but it’s besides the point. I’m not buying it for an investment. I’m buying it too live in long term as my primary residence, I can afford it etc etc. Real Estate is cyclic what comes up must go down but it will come back up whether 5 yrs, 10 yrs , 20 yrs. If 20 yrs from now I break even on it doesn’t matter. I want the neighborhood, the view and the land. For my primary that’s all that matters.
Love the credits/contact info at the end of the article too. Why would someone want to hire one of those guys after reading about that botched project? And notice that the cabinets are from IKEA?! Way to go first-class lol!
Arroyogrande,
Thanks for the article. I’d love to know how the flippers actually end up making out on their “investment,” if anyone is in a position to track this listing. It seems to me that if you factor in time spent on the project (time = money in my book), this foursome is already in the hole.
Yes, and also opportunity cost of that money being tied up in RE. Gold or stocks would have done a lot better.
I didn’t think about this when it came to inflation and metals.
http://articles.news.aol.com/business/article.adp?id=20060422211509990005&ncid=NWS00010000000001
A Penny for Your Thoughts, and 1.4 Cents for the Penny
By FLOYD NORRIS, The New York Times
(April 22) - What happens if a penny is worth more than 1 cent?
That is an issue the United States Mint could soon face if the price of metals keeps rising. Already it costs the mint well more than a cent to make a penny.
Last year, the U.S. Mint made 7.7 billion pennies — more than the number of all the other coins it produced.
This week the cost of the metals in a penny rose above 0.8 cents, more than twice the value of last fall. Because the government spends at least another six-tenths of a cent — above and beyond the cost of the metal — to make each penny, it will lose nearly half a cent on each new one it mints.
The real problem could come if metals prices rise so high that it would be economical to melt down pennies for the metals they contain.
Appearances aside, pennies no longer contain much copper. In the middle of 1982, after copper prices rose to record levels, the mint starting making pennies that consist mostly of zinc, with just a thin copper coating.
But these days, zinc is newly popular. Rising industrial demand and speculation have sent the price rocketing. Since the end of 2003, zinc prices have tripled. Gold, by contrast, is up only about 50 percent.
“What is really new in the commodity world is the extent to which hard commodities have been converted to financial assets through exchange-traded funds and hedge funds,” said Ed Yardeni, the chief investment strategist of Oak Associates.
“In the late 90’s,” Mr. Yardeni added, “my hedge fund friends were all experts in technology. Now all they talk about is zinc, lead and oil. There is a lot of money that has poured into these areas.”
That may mean that a bubble is brewing, but Mr. Yardeni thinks the run is not yet over.
Asked if the mint had a backup plan for what it will do if zinc prices rise far enough that it could pay to melt down pennies, a spokesman said that such issues were for Congress to decide. Perhaps the mint could go back to making steel pennies, as it did during World War II when copper was needed for the war effort.
Pennies, meanwhile, are in high demand. Last year, the mint made 7.7 billion of them — more than the number of all the other coins it produced. In the first three months of this year, the pace of penny production rose to an annual rate of 9 billion — the highest since 2001.
Why so many? Perhaps there is now some hoarding in expectation that metal prices will keep rising, but mostly it is an issue of sales taxes, which in most states are added to the retail price and assure that the total price of many items will require pennies to be given in change if a customer pays with dollar bills. That helps explain why the idea of eliminating the penny has gone nowhere.
So retailers demand pennies from their banks, the banks demand them from the Federal Reserve, and the Fed orders them from the mint. Many of the people who get the pennies in change throw them into a jar, where they may sit for years, requiring the mint to make more and more of them.
And, at these prices, lose money on every one.
Hah! Fiat money my tush! The US is on the zinc and copper standard! Now to start hoarding pennies…
How can this old loon Alice really believe Bakersfield has been undervalued. The last time I checked the median income for Kern County was 37,500- that’s right around 7 times the median asking price for a home here. I’ve lived in this hole for most of my life and the jobs just don’t exist for this type of pricing.
FYI: for all you LA people letting your teenage demons tag and gangbang, there’s a new number for the Bakersfield Police for this type of activity, I’ll certainly be calling it quite often. Rapid responce and arrest is the name of the game now. GO AWAY!