Looking around at all the headlines recently, its hard not to notice that real estate is generally increasing in value at a more rapid pace than previous years, rents are doing the same, and there is a lack of affordable housing. Being in Bakersfield, California, we are a place that people will generally overlook or not think of as “California”, but being that we are now one of the most affordable markets in California, people are starting to pay more attention.
Why Are People Coming to Bakersfield?
California being a high expense state is starting to get too expensive for certain people, and those people are moving out to other states, however, people who are being priced out of the more major markets in California are looking for refuge, and often times they are finding it in places like Bakersfield.
Most people may not know Bakersfield as more than the place you drive through to get to San Francisco, Los Angeles, or Las Vegas, but as prices keep rising, more people are starting to realize that coming to a place like Bakersfield can have its perks, especially since the pandemic has started making peoples work situation more mobile.
Does California Still Have Cash Flow?
Looking back over the past ten years, the single family property value in Bakersfield has grown on average around 12.5%/ year! This is a great number considering the stock market will fetch you the same return, but oftentimes without the benefit of the cash flow that you receive from a real estate investment. With the real estate investment, not only do you receive the appreciation from the asset, but you also receive the cash flow on a monthly basis (if purchased correctly).
If you are looking to purchase an investment property in California right now, and are still looking for cash flow, most people think it is impossible, however, in Bakersfield there are still many cash flowing properties, and as time goes on and people find out about this real estate environment, I believe, these cash flowing properties will start to be fewer and farther between because this will continue to be the value destination in California and therefore more people will come in, and bid up those prices that allow us cash flow today.
How Much Do I Have To Pay To Live In Bakersfield?
Since the pandemic, most of our real estate growth has happened, like most other places in the State, however, if you are looking for a nice mid range property that is only a few years old, and potentially even new, in a decent neighborhood, you would be looking to pay around $350,000. If you take this same number and put it in the more major markets around California you may notice that number goes much higher. For example, in Stockton CA, the Median home price is $420,000. In Riverside, the median home price is $600,000. In San Bernardino, the median home price is $440,000. At a minimum, this is 20% more expensive than Bakersfield, and by the way, there is not as much traffic and you don’t have to live in 800 SF you can live in a nice 3 bed 2 bath 1600 SF home for that price in Bakersfield!
What Does It Take To Get A Property In Bakersfield?
Although you might be paying less, it’s not just you that is looking at Bakersfield as the potential next place to invest or call home. Therefore, you have to be prepared to make offers on properties. Yes, offer’S’! You will need to be a solid Buyer and willing to move forward with minimal contingencies on the property. Now, this doesn’t necessarily mean that you have to waive contingencies up front, but you do have to come from a strong position.
It also helps to have someone who knows the area, and being born in raised in Bakersfield, we are very comfortable with this area. People who know the area can help you decide if that house you want to flip is on the right side of the street, or if that new home you are purchasing will be near the water treatment plant that gives off a certain odor…
All in all, I think if you are looking at Bakersfield as your potential next home, or your potential next investment destination, you should move forward with your decision. There are so many things happening from all different angles that it seems to hard to believe there would not be forward movement of one kind or another on a large scale over the years to come.
Of course, we are always here as well for our any help or questions, and would be happy to assist in acquiring your next property!
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Synergy Real Estate & Property Management
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