Bakersfield, CA -- (ReleaseWire) -- 04/29/2016 --The continuing decline in oil prices has lead to higher unemployment rates in Kern County, California. Unemployment is as high as 9.1%, almost twice the national average of 4.8%. As a result, uncertainty lingers of how the housing market in Bakersfield is going to perform in 2016.
In 2007, during the housing boom, Bakersfield, CA was one of the hottest real estate markets in the nation. Aside from historically low-interest rates, sub-prime lending, and builders scrambling to keep up with new construction demand, Bakersfield's economy was thriving primarily from $99 a barrel oil. As of closing bell on February 18, 2016, oil was trading at $29.75 per barrel, a 70% decline.
Kern County is one of the leading oil producing counties in the United States. It's county seat, Bakersfield, has 6.9% of its workforce in oil related industries. According to the Los Angeles Times article, "Plunging Oil Prices Choke Off Boom in Bakersfield," plunging oil prices worldwide are landing hard in Bakersfield. In the article, Melissa Rossiter, a spokeswoman for the local Chamber of Commerce states, "Either you work in oil or you know someone who does."
When oil prices drop, it greatly affects the housing market in Bakersfield. Many residents who are the head of household, work in the oil, gas, and/or related industries. Many homeowners have begun to alter their spending habits, as more and more families will begin to spend, shop and travel less, to save as much money as possible. Ultimately, this contraction of spending trickles into other sectors of the local economy.
Local Home Solutions, a local real estate investment company headquartered in Bakersfield, has noticed more and more residents are deciding to sell their property while they can, to avoid foreclosure and others are relocating to other states.
CFO and Vice President of Local Home Solutions, Alberto Gomez states, "The oil industry has forced more and more homeowners to put their homes up for sale, in anticipation of a potential lay-off. Many homeowners are still very able to afford their monthly payments. However their motivation to sell quickly stems more from fear of a possible job loss, rather than a financial hardship."
In a recent interview with KGET TV, Gary Crabtree, a longtime appraiser and real estate expert in Bakersfield stated, "In spite of the economy that we are suffering through, the housing market is remaining stable."
Crabtree goes on to predict that median purchase price appreciation will deteriorate to 2-3% annually, inventory is expected to rise, whereas demand, (YoY) sales volume, and new construction permits, will begin to decrease in 2016.
About Local Home Solutions
Local Home Solutions is a real estate investment company in Bakersfield, CA that has been serving the Kern County area for over 13 years. The main focus of the company is to provide solutions to homeowners in situations such as debt relief, pre-foreclosure and other financing alternatives. Local Home Solutions has a proven track record of building relationships with real estate professionals in Kern County and has helped over 600 families find solutions to their real estate questions.
For more information visit, http://www.localhomesolutions.com.
9530 Hageman Rd Ste B-392