Vacancy in Downtown Bakersfield Apartments
Currently Bakersfield shows a sub 6% vacancy rate for multifamily properties in the Downtown sub-market. This trend is forecasted to increase over the next quarters, finally peaking in early 2021.
In my opinion, the vacancy numbers which were forecast are based in large part by the coronavirus. I do not know that we will, in fact, lose close to 1% occupancy in the downtown area, however, I do think that we will see a lot of transitioning over the next few months due to the issues. The thing that I see will save our vacancy rates is actually having people who are moving from out of the area, and renting properties which would have previously remained vacant.
As far as property management is concerned, we have seen our personal leasing numbers go up which our landlords are happy about, and a lot of this is due to people who are coming from out of the area to jobs here in Bakersfield.
Rents in Downtown Bakersfield Multifamily
Rents in Downtown Bakersfield have seen a steady incline over the past few years. This has been seen, especially in the higher end properties that are being developed or re-developed. Downtown now has some of the highest class A rents in the whole city of Bakersfield. That being said, again, due to coronavirus it does seem that the forecasted numbers will be coming down and in some cases the growth is expected to go negative starting towards the end of 2020 and running through the middle of 2021. Once we see the drop in rents over the next 2-4 quarters however, we should see significant rent growth for the next year or more as well as we get back to previous rents and even higher rents than before as well. The average asking rent for an apartment building in downtown Bakersfield is around $1.07 per square foot currently.
Sales in Downtown Bakersfield Rentals
Sales volume was very high in the last quarter of 2019 as well as the average price per unit. In that quarter, we saw the average price per unit for an investment property in Central Bakersfield to be over $90,000/unit. The forecasted numbers moving forward are still also showing another dip due to COVID 19, however, there should be a strong come back in the market as things get figured out with the virus. This should put us behind by a few quarters, but things are looking solid and will most likely come back quickly.
Over the past 12 months we have seen that the average sales price for the Central Bakersfield market in multifamily properties was around $1.5M with an average price per unit around $92,000. The average vacancy rate at the time of sale was around 3% for these multifamily properties, and the average time of ownership was around 6.6 years.
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