Four years ago, nine times as many homes were for sale in Bakersfield. Now, inventory is at an all-time low.
Investors with cash are creating fierce bidding wars and rapid turnover. 'For Sale' signs are hard to find these days. Right now, there are 534 houses on the Bakersfield market. Four years ago, 4,800 were for sale.
"It took over seven months to find my home. I want to say over 30 bids I had placed," said Sarah Guzman, a new homeowner.
This is the first time Sarah Guzman is buying a home by herself. Nearly three dozen rejections sent Guzman on an emotional roller coaster. "You'll feel determined. You'll get depressed. You'll decide you don't want to purchase a home again," explained Guzman.
Buyers have to outbid each other, sometimes offering more than the asking price. "This house just came on the market? What do you mean it's already pending? They stopped taking bids," continued Guzman.
Sheeza Gordon is a real estate agent with Watson Realty in Bakersfield. She sold 134 homes last year. Gordon said she has never seen so few houses for sale.
"You have to be extremely aggressive to get a home. You have to be extremely motivated and you have to not get too discouraged," said Gordon.
Gordon said there are plenty of homes out there, but many of them belong to banks that aren't releasing them yet. "Why would they release inventory if they are smart enough because everything that they put on the market is selling for multiple offers?," continued Gordon.
Investors with cash often outbid home loan applicants like Guzman. "I have a really big investor who wants to buy 70 homes, all cash," said Gordon.
Investors buy homes and rent them to people who can't buy, usually for reasons like bad credit following foreclosure.
"A good portion of our community is turning from home ownership to one of home renters. Typically renters do not have the same pride of ownership. The properties will run down, which could cause blight in neighborhoods and cities," said Gary Crabtree of Affiliated Appraisers.
Crabtree said he does not expect our local real estate market to make a full recovery until 2015.