Bakersfield's housing market is holding steady, but high interest rates, a soft job market and the full cost of homeownership are making it harder for buyers to close the gap between a listing price and what they can actually afford.
The median closed-sale price for a Bakersfield home is holding at about $410,000, according to local appraiser Gary Crabtree. Crabtree describes the market as stable, but says that stability comes with an important caveat.
"The market is holding its own despite the high interest rates, despite the job market," Crabtree said.
His latest report estimates a household would need to earn more than $101,000 a year to qualify for a median-priced home, a figure derived from the Housing Affordability Index, which factors in median home price, current interest rates and median family income for the Bakersfield area.
Crabtree says about 38% of Bakersfield families — roughly 1 in 3 — can currently afford a median-priced home. By comparison, only about 22%, or 1 in 4 families statewide, can afford to buy at current prices and interest rates.
He says interest rates are a primary reason prices have not climbed further.
"I believe that the median sales price is holding stable only because of interest rates," Crabtree said. "People cannot afford a home right now because of the affordability and of high interest rates. And another factor is a rather soft employment market."
While the closed-sale price has remained stable, Crabtree notes that active listing prices and pending sale prices have both declined over the past month — a signal he says points to a market that is holding its own but not gaining momentum.
He adds that many potential buyers are in a wait-and-see posture, holding off on purchases until broader economic conditions shift.
"Many people are in a wait-and-see attitude until the war is over," Crabtree said. "And if that's going to change the economy enough to bolster them to purchase with maybe lower interest rates — we need to be at 4.5%, 5% interest in order to turn the market loose and let it operate in its normal manner."
Beyond the listing price, Crabtree says the monthly cost of ownership is where many buyers feel the real pressure. A monthly payment can include principal and interest, property taxes, homeowners insurance and — for some buyers — mortgage insurance or association fees.
His report also shows seller concessions were involved in nearly 6 out of 10 existing-home sales. Crabtree says that figure reflects a deeper affordability strain: many buyers do not have enough cash on hand to cover a down payment on their own.
"The typical buyer does not even have enough money to make a down payment," Crabtree said. "FHA requires a 3% down, and of that money, it goes towards closing costs or it could go towards the down payment, which then the seller is stepping in and helping the buyers complete their down payment so they can sell the house."
He notes that while concessions help buyers get to the closing table, they come at a cost to sellers.
"The seller is receiving less for his house than he normally would without the concessions," Crabtree said.
For first-time buyers especially, Crabtree says working with a realtor is essential to understanding the full picture.
"The realtors know individual needs of buyer and seller, and obviously the realtor that is representing the buyer can guide them through the purchase process and alert them to any issues that they should be concerned about," Crabtree said.
Christopher Smart with Level One Financial echoed that the listing price is only the starting point. Buyers also have to account for the down payment, closing costs and the full monthly payment.
"I would say most overall is just the payment, and then the cash to close. Cash to close means your down payment plus closing costs. That's your total all-in figure," Smart said.
Kevin, who has lived in a southwest Bakersfield neighborhood for two years and also works as a realtor, says buyers should begin with the payment their income can support — not simply the price of the home they want. There are so many factors that go beyond the overall price and people need to be aware of that.
"I think it's the first factor that people need to pay attention to — not necessarily the asking price, but what is the monthly payment, and how much of my monthly gross income does that number represent?" Kevin said.
For buyers, the real question may not be whether they can afford the price on the sign, but whether they can comfortably afford the payment that comes with it.
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