Bakersfield’s housing market appears to be returning to pre-pandemic conditions with a new report showing a second quarter increase in rental vacancies.
A fourth-quarter update from local multifamily specialist Mark Thurston of ASU Commercial says citywide vacancy rates are at their highest level since early 2020 as more buildings are lowering rents than raising them.
The report suggests that the hectic times for local apartment seekers during the pandemic, when property managers said every vacancy was met with dozens of calls from desperate tenants, may finally be returning to normal.
Thurston said by email that the recent slowdown has hit high-end units particularly hard. He noted that the downward trend in rent prices for Class A apartments in the third quarter was joined by Class B units in the fourth quarter.
Another trend he pointed out was geographic orientation. rents fell mostly in areas of the city that recently benefited from higher rent prices: southwest, northwest and central Bakersfield, while prices increased in areas with generally lower rents: east, south and north of the city;
“It is likely that the three submarkets that saw rent growth are still trying to catch up with the overall market in their rent levels,” Thurston wrote.
Bakersfield senior apartment developer Andy Fuller said Bakersfield is “definitely feeling some softness in the market.”
While he hasn’t had to adjust prices at his company’s apartment communities, Fuller said the conditions, which he described as corrections, have forced his staff to “put their best foot forward.”
“You have to earn it back the old-fashioned way,” he said. “You have to work for it.”
Fuller’s view was that the market, perhaps boosted by inflation, is returning to where it was before demand spiked during the pandemic.
“It’s looking more and more like it used to be,” he said. “We had a pretty steady market and you have to compete for business like everybody else.”
The city’s average vacancy rate, an inverse measure of demand, rose from 1.79 percent to 2.54 percent since Sept. 30, the highest since the first three months of 2020, Thurston’s report said. For comparison, Bakersfield’s rate. The average vacancy rate in the second quarter of this year was 1.38 percent.
35 apartment buildings in the city have raised their asking rents in the past three months, according to the update. That was 2 fewer than the number that reported an increase in rents.
Notably, about a third of the buildings that cut their rents also raised their asking rates for smaller unit sizes, Thurston reported.
Northwest Bakersfield led the city in median rental prices, up to $2,400 a month for a three-bedroom, followed by the west side of the city’s southwest, where a three-bedroom commanded a high rent of $2,276.
At the opposite end, central Bakersfield had the most expensive rents in the city, with three-bedrooms topping out at $1,500 a month.
Overall, Thurston’s report said median rents declined in all unit sizes except studios and lofts during the fourth quarter.