Real Estate

Tuesday, Jan 08 2013 03:04 PM

Home report sees local market 'in full recovery mode'

BY JOHN COX Californian staff writer jcox@bakersfield.com

A closely watched local report says Bakersfield's home market appears to be in "full recovery mode" thanks to a tighter supply and fewer foreclosures.

Appraiser Gary Crabtree's preliminary December report states that the median price of a home sold in Bakersfield that month -- $160,000 -- was almost 7 percent higher than November's level, and nearly one-fifth greater than December 2011's median of $134,950.

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In the second quarter of 2006, the city's median home sale price peaked at $293,000. The median is the point at which half of the homes sold for more and half sold for less.

Having fewer homes on the market contributed to the market's "amazing" strength, Crabtree wrote in a note accompanying the report. He noted that 515 homes were actively listed in December -- about 14 percent less than were sold in November, or 44 percent fewer than December 2011's total.

Meanwhile, only 247 Bakersfield homes were foreclosed on last month, according to the report. That's 38 percent less than in December 2011.

Crabtree called these and other December data "very good news" that supports the need for new home construction and the jobs such activity brings. It also suggests that "the market has nowhere to go but up," he wrote.

"The question is how fast and how far?" he added.

Scott Tobias, past president of the Bakersfield Association of Realtors, ventured an answer in an interview Tuesday.

"It'll take a couple of years, really, to get this thing squared away," he said.

"I think we're on our way to a recovery. How long it takes is speculative. But we are heading in the right direction."

Signs of recovery were not expected quite this soon, Tobias said. There has been much talk in recent years about the "shadow inventory" of foreclosed or otherwise "distressed" homes that banks were said to be holding off the market.

"It just hasn't happened," he said of the anticipated flood of troubled homes on the market. Instead, he said, these properties have largely been auctioned off to individuals or packaged and sold in bulk to investors.

The signs of recovery are good but they aren't everything homebuilders hoped for, said Greg Gibbons, co-owner of Gibbons & Wheelan, a local homebuilding company.

Builders' costs are on the rise, particularly those related to buying an empty lot to develop, he noted. Problem is, costs don't determine prices -- appraisals do, Gibbons said.

"We can't raise our prices to keep up with costs because appraisals don't keep up with costs," he said.

"As builders it just gives us a little bit of a pinch we have to figure out how to deal with."

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