The Bakersfield housing market has gone back to bidding wars as buyers fight over foreclosed homes. According to one local housing report...home prices inched up another 8 percent last month. That's the second consecutive month of price increases.
A 3-bedroom northwest Bakersfield home already has a potential buyer after sitting on the market for 3 months. Realtor Steve Urner said, "You know in one particular neighborhood there might be a home that 20 people want so it's going to dictate a higher price."
Urner says he's watched bidding wars break out on foreclosed homes, bumping up the price of some homes by tens of thousands. But the problem is, the home is appraised much lower, so there's trouble when the prospective buyer tries to get approved for a loan. "We just went through a subprime meltdown. Now we have subprime appraisers. Some are from out of town, they don't have a clue about neighborhood trends,'' Urner said.
Appraiser Gary Crabtree agrees, noting many lenders are hiring appraisal companies at lower fees. "The people that are doing the appraisals are inexpereinced or they don't have the time in the day to do a good job at $200 to do a good appraisal."
Crabtree publishes a monthly report that shows the median home price went up 8 percent last month to $135,000.
''They are saying the market is still going down at 2 percent per month,'' Crabtree said of inexperienced appraisers. ''So they are applying a percent depreciation rate on all of their comparable sales. In fact, the market has gone up and in essence the market has stabilized.''
But it may not stay that way. A wave of homes that banks were keeping out of the real estate market to help stabilize dropping prices are set to be released in September. "We're gonna see a flood of foreclosures at one time,'' Crabtree said. ''It could be upwards of 4,000." And that might drive home prices back down.
