Theories abounded Friday as preliminary data on home sales in Bakersfield last month took a sharp turn that appears to have lifted the city’s median sale price 3.2% in a single month to reach $398,000.
Expectations had been that there would be a decline in the price median, defined as the point at which half the homes sold for more and half went for less. That would follow a pattern set in September, when the median slid 2.4%.
But no: At a time of year many in the business expect demand to hunker down for the winter, the opposite seems to have happened.
Not only did interest rates continue to climb in October, to more than 7.6%, further limiting the number of people able to buy a home in the city, but buyer demand reportedly jumped.
“It shouldn’t be doing this,” said local appraiser Gary Crabtree, who provided the numbers, which he said reflected about 85% to 90% of the city’s existing-home sales last month. “Is it an anomaly? I think so.”
Different explanations came forward in conversations with local real estate professionals around town. No one seemed sure, least of all the one who raised the question — Crabtree.
He hypothesized the increase may have been a surge of what he called panic buying. Perhaps, he said, homeowners in tight economic situations were being forced to sell their homes — or, possibly, they were trying to get out of the market altogether while prices were still high.
“I think this is maybe the last panic buy before things start to turn south. I don’t know,” he said.
Others were skeptical, like real estate agent Terri Collins, who called it “just amazing.”
“Just goes to show that people need and want to buy a house,” Collins said, adding that the idea that homebuying slows to a stop in the fall is just wrong. People move when they need to, she said, and it may be better to wait until after school starts and the Kern County Fair is over.
Her theory was that “there’s just too much demand out there.”
“It’s a high, that’s all,” she said. “It’s a high that is likely to even out, to settle in.”
Realtor Bob Malkin, on the other hand, said he did notice the market slowing down in October. He suggested the price median may have increased because of a lack of inventory — which has, indeed, shown up in Crabtree’s monthly updates in recent years.
Malkin pointed to another possibility, that the change was driven by an increase in business from people leaving Bakersfield while others come in — another trend local real estate professionals have attested to since the pandemic.
Alternatively, he said, there may have been an increase in first-time buyers “that may be able to get through that affordability threshold.”
Crabtree holds that as the least likely, given that affordability, as measured by the percentage of people earning Bakersfield’s median wage who can afford a median-priced home in the city, has plummeted lately because of rising interest rates.
Based on last month’s preliminary date, he said, affordability settled at 26%, a low he has never seen before. Crabtree noted that qualifying for a home priced at the city’s median price last month requires a household to make a total of more than $108,000.
Local real estate agent and broker Robin Ablin agreed the market seems to be defying economic indicators that would suggest the price ought to be coming down, not rising.
He speculated that it may just come down to the fact that few homes are available for $200,000 or less, while high-earners are more insulated from affordability restraints. Those two, taken together, may be tilting the city’s price median upward.
“I think the median has been rising because only wealthier people are buying homes, and they’re buying more expensive homes,” he said.
