Reporting: Slipping home prices won’t last

Despite recent softening, Bakersfield’s single-family home market will likely see price increases in the 12 percent to 15 percent range this year as previously foreclosed homeowners look to buy houses again, a leading local observer predicted Tuesday.

Bakersfield appraiser Gary Crabtree made the forecast in a monthly housing update stating that median home sale prices in the city fell 6.1 percent in January to $195,250.

That median — defined as the point at which half the homes sold for more and half sold for less — was still 18.9 percent greater than the local market saw in January 2012.

The signs of cooling were fairly pronounced in January data, however. The number of home escrows that closed that month was 371, 6.5 percent less than December’s totals. Meanwhile, the inventory of homes for sale in the city grew by 1.6 percent to 945, Crabtree reported.

Cash investors who flooded the local market in recent years, sometimes squeezing out would-be homeowners, have already begun exiting the market, Crabtree noted, largely because rental prices have not kept up with local home price appreciation.
Their exit may present buying opportunities for people who lost their homes to foreclosure during the recession, even as it could hurt the rental market, Crabtree wrote.

“In 2014, I expect to see the ‘boomerang’ (previously foreclosed homeowner turned tenant) buyer replace the investors, thus supplying demand for a moderate increased in pricing,” he wrote.

“However, this will also place a downward pressure on rental prices as the single family rental vacancy (rate) increases with the loss of this market segment.”

Local residential real estate investor Frank St. Clair generally agreed with Crabtree’s assessment. The one point he disputed was the assertion that January was a slow sales month.
In fact, St. Clair said, home sales picked up noticeably in the middle of January — something Crabtree’s data wouldn’t show because they reflect transactions that can be from November and December.

“Right about the 15th (of January), it really started picking up dramatically,” he said.

The recent sales spurt looks like it could carry on through summer, St. Clair predicted, adding that he believes Crabtree is right about increasing demand from people who listed their homes to foreclosure a few years ago.

“We will get overall appreciation” as high as 15 percent this year, he said.

BY JOHN COX Californian staff writer jcox(at)bakersfield(dotted)com

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