BAKERSFIELD, Calif. — Looking to sell? Great! Looking to buy or rent? Not so great.
The coronavirus has had its impact on all markets, including the housing market. With a low inventory and dropping interest rates, the housing market is hot and in demand. With that demand comes difficulty for many to find a home, especially when some buyers are will to offer above asking price.
Benny Villarreal started in real estate back in 2005 and got his real estate license in 2006, just before the economy entered a recession. So he’s no stranger to hard times.
“That's when the economy was you know at its peak — and then it tanked, it tanked right after that. We had a really big recession in 2007 and pricing dropped dramatically.”
He said when the coronavirus first hit, he and others in the business were worried about losing business, but instead COVID-19 has made this the perfect market to sell.
“When it first happened rates jumped up to about 4.5, 5 percent and some of these big lenders weren’t even buying any kind of FHA they were scared to touch any of that kind of stuff. So interest rates went up and then after a while, the Feds dropped down the rates and it just created a lot of traffic. So much traffic to where these last two months have been super super busy — like a total of 13 to 14 houses in contract.”
Benny says prior to COVID, he normally saw lending interest rates of about 3.5 to 3.8 percent. Now he’s seeing rates as low as 2.8 percent.
“Now you're starting to see an influx of a lot of clients for every home creating a demand because rates are low and now I don’t see any of those problems with appraisals and I’m actually starting to see appraisals going up even higher," he said. "You walk into that house and you're literally waiting in line for all these other people to see and so when you get there you know there's a demand.”
And because of that demand, if you’re in the market for a place to stay, you might not find it right now.
“The sad part about right now too is the vacancy. There are hardly any vacancies out there for rentals and it's very hard to find a rental and I have a lot of people are asking about rentals and there's enough and really out there.”
According to a report from Realtor.com, the number of newly listed properties in the third and fourth week of March fell by 13 percent and 34 percent, respectively. In Bakersfield, Realtor.com reports foreclosures are down 13 and 121 listins have had a price reduction.
In Benny’s experience, Kern County normally sees anywhere between 1200 to 1400 listings on the market. He said the last time he checked there were only about 745.
And even though it might seem counter-intuitive for a realtor to discourage people from making an offer, Benny says if he thinks it's a bad idea he’s not afraid to tell clients to hold off.
"People falling behind on mortgages — there are plans to help," he said. "However when you fall behind its hard to come back from it.”
If you’re still looking for a place, make sure you know what programs are available to help you. Programs through the USDA or lenders can help keep you in your home down the road.