A new report says the Bakersfield apartment market has eased somewhat in the last three months of 2021, as the city-wide occupancy rate increased for a second consecutive quarter and rental prices grew at their slowest rate since the start of the year.
Results tabulated by Bakersfield broker Marc Thurston may suggest that the local rental market is cooling down somewhat, possibly due to inflation, even though the multi-family residential segment remains at historically tight levels.
Thurston, senior vice president of ASU Commercial, released a summary of the market this week that he described as mixed: Parts of the city have seen more vacant homes, while others have seen fewer units available during the last three months of the year. He noted that four buildings in his quarterly survey actually posted lower asking rents in the fourth quarter.
Whether the slowdown is the start of a lasting trend remains to be seen. Thurston noted that the fourth quarter results tended to be the weakest of the year since 2018. Additionally, there is talk of a larger influence whose sustainability has been a source of speculation nationwide.
“From my conversation with several owners (of apartment buildings), it looks like inflation may be slowing rental activity from the highs reached by the market in the middle of the year,” he said. he declared by e-mail Monday evening.
The number of vacant apartments in Bakersfield fell to less than 1 percent in the second quarter. This unprecedented low coincided with record results in the city’s single-family home market, which over the same period of time finally surpassed the peak in local median selling prices before the 2006 housing crisis. 07.
Observers interpreted the extraordinary performance of the local housing rental and sale markets as resulting from an insufficient supply of units, as well as high demand from people in other parts of the state. who are newly licensed to work from home and attracted to Kern County. relatively high affordability.
It should be noted that while the supply of homes for sale in Bakersfield fell by almost a quarter in November alone, the demand for housing, as reflected in the deals, fell by less than 2%. , according to a summary released by local reviewer Gary Crabtree.
As a sign of the continued strength of the sale market, Crabtree reported that the city’s median sale price for an existing home fell less than 1% in November to $ 338,950, about 17% higher than the median reported one year earlier.
Crabtree, as he has done before, attributed the strength of the local domestic market to Bakersfield’s low prices compared to elsewhere in California.
“Bakersfield’s median price is 57% lower than the state’s median price and the latest data indicates that the Bakersfield market is the third (most affordable) in the state,” Crabtree wrote in a published memo. early this month.
In the city’s apartment market, Thurston reported, vacancy rates rose 1.76% from 1.28% in the third quarter. The most recent rate was virtually the same as the year before.
Areas where vacant housing has generally increased include the eastern part of the south-west of Bakersfield, the north-west and the central part of the city.
In the north and northeast of Bakersfield, vacant accommodation has mostly declined, which means it has become more difficult to find an apartment there. The other areas were either mixed or virtually unchanged.
Across all areas and product types, prices for Bakersfield apartment rentals rose just under 15% in 2021, which Thurston said has occurred at different speeds over the course of the year. year, with the fourth quarter having the slowest growth rate since the first quarter.
There was a substantial difference in how the different apartment types fared in 2021, according to Thurston’s report. Studio rents grew on average by 10.33%, which was the slowest rate of increase reported locally in 2021. One-bedroom apartments grew fastest at 18%.