Falling Demand Slows Rise of Home Prices (Bakersfield)

BY COURTENAY EDELHART, Californian staff writer

Although the supply of homes for sale in the Bakersfield area fell slightly from June to July, demand dropped even more.
That's causing the fragile escalation of home prices to slow, according to the Preliminary Crabtree Report, a monthly gauge of the local real estate market prepared by Gary Crabtree of Affiliated Appraisers.
Crabtree called supply outpacing demand a "disturbing trend."
Pending sales, an indication of future demand, dropped 10 percent from June to July, but rose 4.7 percent compared with July 2010.
Active listings fell 1.8 percent to 2,012 for the month, but were up 12.5 percent for the year.
"Overall, it just looks like the market is starting to lose steam," Crabtree said in an interview Monday. "But at least prices aren't going down -- yet."
The median sale price for existing single-family homes in the area was $138,450 last month, up 0.3 percent for the month but down 4.3 percent compared with July 2010.
"Now with the downgrading of the nation's credit rating, that's bound to push interest rates up, so we're still in for an interesting ride," Crabtree said.
The swelling inventory pushed the average number of days on the market from 71 in June to 81 in July.
That's up 15.7 percent from July 2010.
Belinda Capilla, an agent with Prudential-Tobias Realty in Bakersfield, said consumers are simply worried about the economy.
"In a typical market when (interest) rates remain low a long time, people sit on the fence hoping they'll go even lower, and then when they go up they all rush in," she said. "But buyers aren't behaving as they would in a normal market.
"Investors are doing really well with cash offers because they're confident values are going up in the long-run, but for the poor person who has to get financing, there's a lot of concern about unemployment and wages and am I going to get enough hours?
"People are just really worried right now."
Jason Gillies, a broker with Coldwell Banker Preferred in Bakersfield, said he isn't worried that the market may be headed for a glut in supply again.
"My listings are bank-owned properties that are better and cleaner and priced well, and those are selling," he said. "I just put two on the market last Thursday and I have at least three offers on each of them, so we're still getting multiple offers."
Lender-owned properties still account for 42.1 percent of local sales, compared with a national average of 28.7 percent.
On the upside, foreclosure sales dropped 16.6 percent to 240 for the month, a 10.4 percent fall from July 2010.

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