Foreclosed Units Dominate The Bakersfield Market

October 4th, 2007

Most of the properties up for the sale in Bakersfield are either a foreclosed property or about to be. This will inevitably pull down the prices of other houses. Nearly a quarter of the properties listed for sale in September this year was marked as a distressed property. It meant the buyer was offering them for sale under great pressure. This information has been released by The Crabtree Report written and circulated by appraiser Gary Crabtree.

Under the genre of ‘distressed’ fall those units owned by banks. These are known as short sales wherein the lender agrees to forgive a part of the loan that is impossible to realize by selling the mortgaged property. In this way, foreclosure is avoided by both and is beneficial to both. The borrower is spared being given a bad credit rating because of foreclosure and the lender does not have to go through the hassles of a time and money consuming foreclosure process where the takings would in all probability be less than what is pocketed in a short sale. Relocation companies are also opting for the same route. Crabtree said that one out of 4.2 residential houses in greater Bakersfield were ‘distressed’.

The figures are staggering and point to a buyer’s market. In September the distressed listings went from bad to worse with one out of 5.6 falling in that category. Last years statistics of distressed units are not available. Most probably the numbers were so low that these were not worth noting. Houses on an average were being sold for $42,000 less than the standard price.

Professionals are very much aware of the fall out in the local real estate market. Those wanting to make quick profits are also tuned in to strike at the opportune moment. The hunt is on for desperate sellers. It is not just individuals but banks and developers are badly in need of cash. Here the sellers should ensure that the prices of the units are competitive. Some sort of coordination is the call of the hour. One must be realistic as well as patient.

The situation in Bakersfield has worsened because of too much activity in house construction and a penchant among borrowers for sub-prime loans. The Inland Empire, Riverside, San Bernardino and Sacramento are being one of the worst hit pockets. These were the regions where prices went up fast. Now they are shooting down faster.