Tehachapi News

Tehachapi real estate seeks equilibrium

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As the year 2009 unwound, the Greater Tehachapi real estate market perked up.

Bernie Connolly, co-owner and associate broker of Coldwell Banker Best in Tehachapi, said a third-quarter comparison in sales shows a big jump.

In the 2009 August-September-October quarter, 123 homes closed escrow, compared to 90 in the same time period in 2008 - a 32 percent increase in sales.

“A lot of the sales were foreclosures and short sales,” he said. “Most of the activity has been at the lower end of the market.”

The average sale price dropped in that same year-to-year comparison of third quarters, to $197,550 in 2009 from $240,100 in 2008 - a decrease in price of 17.7 percent.

The lower prices mean opportunities for people who, until recently, would have been priced out of the market.

“For years it was so heartbreaking. The children couldn't buy,” said Tammy Wallace, Realtor with Town and Country Realty. “Now they can.”

Square foot

The average price per square foot, Connolly said, dropped to $106 in 2009 from $140 in 2008.

“The square footage is a more meaningful number,” Connolly said.

Realtors are selling bigger houses, he said.

In the third quarter of 2009, the average home size was 1,859, up from 1,718 in the same quarter of 2008.

“The average price doesn't tell the true impact in prices. The square foot does,” he said. “People are buying bigger houses for less money.”

The increase in sales, he said is due to a combination of factors: low prices, low interest rates that hover around 5 percent near historic lows and the extension of the deadline of the $8,500 tax credit for first-time home buyers to April 2010 . That tax credit was due to expire Nov. 30.

Another tax credit of $6,500 for existing homeowners should liven up sales even more.

“Prices seem to be stabilizing,” Connolly said. “Inventory is half of what it was a year ago.”

The drop in inventory, he said, is what caused the prices to stabilize.

“There’s not as much to choose from. Buyers are not as selective. There is more competition. We are seeing multiple offers,” he said. “There is competition for entry-level homes.”

He said year-to-year third quarter sales in Bear Valley Springs are up 45 percent and up 56 percent in Tehachapi city.

“The real estate market ebbs and flows like the tide,” Connolly said.

For 2010, Connolly sees continuing stability in prices as the market seeks equilibrium between supply and demand, and he sees an increase in activity toward the middle of the year.

Property values

According to the Kern County Assessor, property values in the city of Tehachapi jumped 2 percent for the fiscal year 2009-2010 while the value of property for Kern County as a whole fell 6.4 percent. Assistant Assessor Anthony Ansolabehere said that commercial developments increased the value of taxable property in the city.