It is the new year. 2024 has entered the scene with a loud bang but so has the change in the Bakersfield and other real estate markets. A lot of changes have occurred and a lot more is about to happen with uncertainty lingering over politics and other factors.
Today we are here to remove some of that uncertainty for you and make your way easier towards buying into Bakersfield. Let’s go!
First of all, it is not yet certain if the rates in Bakersfield real estate will go higher or lower. With elections just around the corner there is one thing that can be said is that the real estate policy might see a shift.
The information we are presenting here is coming from established lenders sharing their insights into the real estate market and its ups and downs.
Tax rates are known to be up to 3 percent but our Bakersfield real estate lender reveals that only about 23 percent of people have below three percent of rate and even that is not ideal. It can be better understood once you know the origin of this.
The Pandemic and its Aftermath
In 2020 the pandemic shook the world and the real estate market even the Bakersfield real estate market was no exception.
In this lockdown, the recession lasted for two weeks. People couldn’t go out to spend money in shopping and restaurants so the only thing they did was to pay up their credit card balance. This was the first stimulus check.
The other two stem checks came with the opening of markets. By that time people understood that they like savings and having extra money in their banks so their focus was off from acquiring mere luxuries.
But once the lockdown was over people felt like doomsday was approaching and before anybody locked them up again they followed the policy of YOLO and started spending on foreign trips.
This made the savings rate lower than it was before the pandemic i.e. from a 10 percent savings rate it was reduced to just 5 percent.
Lower savings and higher credit card balances are an unfortunate combination but it happened at a frequent rate due to what people have been through with the pandemic.
Savings vs. Debt
So now the credit card balances are above all-time highs and continue to rise while the market is again moving through the recession period.
Moreover, the interest rates on credit cards have risen from 14 to 22 percent making the situation bad to worse. The problem here is that the credit card not only pays for foreign trips but almost for everything. A Lot of people have invested in buying cars for daily use.
A maximum portion of their paychecks go into paying car installments. This means debt is rising and savings remain at a lower level.
So if you are bound by car payments with increasing interest rates you will be in bad shape considering the interest rates are sky-high post-2020 pandemic. So not having any savings even in the form of property investment in Bakersfield real estate will put you in hot waters.
What’s the Solution?
It might appear as a grim situation but there are always ways to counter such money problems. Fortunately, your property can come in handy at this point. How?
Currently, in the US the equity rates are about 58 percent. This means that people will have money tied up in credit card payments but at the same time such high equity rates make their houses cash cows which can be utilized it’s required.
The average amount people could cash out of these houses is above 100,000 dollars. So even if you are into buying a new home in Bakersfield real estate get a rate on the property you can sell.
3 percent Interest Rate a Myth?
It is worth noting that the interest rates on buying property appear to be 3 percent or less however when calculated along with mortgage and credit card balance the figure goes even above 6 percent.
This can vary but is usually higher than 3 percent.
So on top of this if you have car payments you need to make an informed decision without being emotional.
Buyers are always into putting larger amounts into down payments so that they don’t have to pay a large monthly installment.
They may shift their focus to just the monthly payments but they don’t understand the appreciation.
Above two thousand dollars have increased in payment Shock and it is extremely hard to overcome this amount even in small payments.
This increases the debt of the borrower. Another thing the borrower does to lower the debt is avoiding 80 percent of insurance. Mortgage insurance is important and is also very cheap. It is hardly ten percent of the payment Shock.
So there are plenty of chances of buying houses in Bakersfield and moving up a notch. Don’t stick with your 3 percent interest rate because even that is not accurate when you can move into a better place.
But before that listing agents should be asking all potential clients if they have a lot of debt or credit card bills so that only those people purchase properties who can handle the payment Shock.
You need to sell older properties if you need to buy better and improved places, new homes in Bakersfield.
2008 housing disaster
Now the main question lingering in people’s minds is if a recession like that of 2008 will repeat itself if the housing bubble keeps on increasing. Well, that is debatable.
In expert opinion the recession will occur but not like the one in 2008, for totally different reasons. So if that is your excuse for not buying new cheap homes in Bakersfield you are making a mistake.
Buying property will generate employment as well as business so if there is a chance you can buy to improve your lifestyle then you must.
Another reason why the housing bubble won’t burst this time is because the population has increased at a larger rate i.e. almost 30 million more people and due to this a lot of people need new homes.
2024 Market Forecast – Bakersfield Real Estate
The experts paint an improved picture of interest rates which are likely to become lower. However, on mortgages of 30 years, the rates may vary between 5 to 6 percent.
Furthermore, the rates will appreciate, prices will come down and those of us who are buying at this very moment will sell in the next two years.