Bakersfield's first-time homebuyer inventory not as low as elsewhere
BY REBECCA KHEEL Californian staff writer rkheel@bakersfield.com
First-time homebuyers in Bakersfield are being shut out by investors less than their counterparts in other metro areas of California, according to a new study by real estate marketplace website Zillow.
"It could be they're not the types of homes people are looking to rent, so investors won't buy them," said Svenja Gudell, senior economist at Zillow.
The study, released Thursday, looked at Zillow's inventory changes from September 2011 to September 2012 in three price tiers of homes in major metro areas of California. In all areas besides Bakersfield, the bottom tier commonly sought by first-time buyers had the greatest drop. The bottom tier is defined as homes costing less than $88,200.
In Bakersfield, inventory in the bottom tier dropped 20.2 percent. Compare that to Fresno, which had the largest bottom tier drop at 59.7 percent. Overall in California, the bottom tier dropped 42.7 percent.
The reason for Bakersfield's lower drop is probably because investors are not buying up the lower-priced homes as much as they are in other areas, Gudell said.
Investors buy homes to turn into rental properties. And in Bakersfield, the bottom tier homes aren't desirable as rentals, she said.
"Bakersfield was quite overbuilt, so there were a lot foreclosures," Gudell said. "So a lot of houses are not in great shape and not as desirable."
The data indicate that in Bakersfield investors are buying up the middle tier homes, she added. Over the last year, Bakersfield's middle tier inventory dropped 42.5 percent.
That's good news for Bakersfield's first-time homebuyers, Gudell said. In California's other metro areas, investors "leave first-time buyers in the dust," she said.
But Scott Tobias, president of the Bakersfield Association of Realtors, said it's still a struggle for first-time buyers to find a home and beat out investors. On average, it takes about six months for first-time buyers to find a house, he said.
"They get very frustrated," Tobias said. "They place offer after offer. They're competing with investors."
Investors are buying up anything less than $148,050, he said. It's only once properties hit $200,000 that there's more inventory available.
But Bakersfield has a pretty low housing inventory in general, Tobias said. Statewide, there's a three-month inventory, meaning there are as many houses available as can be sold in three months. In Bakersfield, there's only one month of inventory.
"It's still hard to find anything," he said.
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