Every person who is into investing in real estate needs to keep himself updated about the ever-changing real estate markets. Especially when it comes to booming Bakersfield real estate
Fortunately for you, you have us. We bring you the most well-researched facts if you are buying new homes in Bakersfield.
The most important news bits that can affect Bakersfield real estate investment–your investments are covered here today. And you don’t want to miss it.
Table of Content: Bakersfield Real Estate
Bakersfield Real Estate February Predictions
Jerome Powell, chairperson of the Federal Reserve, made some pretty encouraging comments after his last FED meeting.
We are picking up just where we left off in our last market report. First things first, after the latest FED meeting it is clear that there would be no change in market rates.
But since the fed funds rates have already peaked it means no more federal funds rate increase for you. You can be sure of that at least this month when investing in Bakersfield real estate.
Another thing Powell mentioned is the inflation which has been as it was expected. So this is a positive feedback on that account. Furthermore, he does not expect any rate cuts even in the next month due to inflation.
So if you are looking for new houses in Bakersfield you have a darn stable market right now with almost zero chances of any change occurring.
Want to know more about the history of Bakersfield real estate? Check out this Bakersfield Monthly Market report for June 2023.
Layoffs
Photo by Ketut Subiyanto
Layoffs have been worse. In the past year, the layoffs have only increased making the situation appear scary for real estate.
All major American companies have laid off employees in thousands, the number going as high as 12000 for one company.
Layoffs lead to an increase in the unemployment rate which is desirable for FED. Why exactly, you may ask? It shows that they have been successful in slowing down the economy.
This can make the interest rates go up.
Will rates go down?
It can not be said with complete confidence that the rates will go down to the pre-COVID era unless a miracle happens any time soon. Until October 2023 the rates were as high as 8 percent!
Since then the rates have slid down and are currently around 7 percent. Hopefully, the rates will go down for the rest of the year making it ideal for you to get your share of the Bakersfield real estate market.
You may think it is high but if you consider the fluctuating number and the mountain climbed by the rates in October you will see 7 as a blessing.
Do you know Bakersfield is a Booming real estate Market? Check out this article to know how.
California Housing Finance Authority
Those of you unaware of the California Housing Finance Authority commonly known as CalHFA is a Californian Agency. Main goal: to provide affordable housing to the masses.
In this regard, they provide multiple categories of loans to new buyers. Such as:
- bond-backed home loans
- multifamily loans and
- assistance to multifamily developers
Here we will be specifically talking About the Calhfa Dream for All program.
Loan Eligibility
If you are looking forward to becoming a homeowner in Bakersfield but do not have the means, CalHFA is your way out. It specifically provides loans to first-time home buyers.
If the buyer’s parents owned a home before that is still in their ownership, the buyer could be disqualified from this program. So be very vigilant about this.
If you are getting commercial property in Bakersfield for investment purposes you do not qualify for a loan under Cal HFA dream for all. You need to occupy the house otherwise your application won’t be considered.
Last but not least the loan provided can be 20% purchase price or a maximum of 150,000 dollars.
Bear in mind that you need to have ownership of a residence in the last three years to be eligible. Even if you resided in your spouse’s house during that period you are still eligible.
Why should you be careful?
You may think you can just get away with the paperwork and mention you had no homeownership to apply for the loan. Well, that’s where you are wrong.
CalHFA has just hired an investigation agency to look into the paperwork and audit all the applicants. So be very careful don’t let your interest in Bakersfield real estate make you take it the wrong way.
Does CalHFA work for all?
Calhfa’’s Dream for All program does not work for everyone. No doubt it is an excellent assistance program but it targets a specific segment of buyers.
However, buyers who do not fall into this category are welcome to check out other assistance programs such as FHA, VA, USDA, etc.
Shared Appreciation Terms
The concept of shared appreciation is extremely important when it comes to getting a loan. What does it mean?
Shared appreciation means the purchaser shares a percentage of appreciation with the lender in exchange for a lower interest rate.
For example, the state of California would give you 20 percent in a down payment. After you refinance or sell that property you have to pay back that loan.
Of course, Calhfa has its terms in this regard. These include:
There’s not any interest in this assistance program but if you plan to refinance or sell it or for that matter if 30 years go by you must repay the original loan.
But not just that you also have to pay 15 to 20 percent in equity.
This is according to income limits pre-set by the Calhfa program i.e. at 80 percent area median income of a town.
If the income of the borrower is above 80 percent AMI the shared appreciation is 20 percent. If it is below 80 percent AMI the shared appreciation is 15 percent.
So be watchful in which Brackett you lie.
Also, keep in mind that the shared appreciation is capped at a principle of 2 and a half times the original. So that’s a good thing.
You shouldn’t worry if they will take thousands of dollars from you in case of higher appreciation rates.
Just in case you don’t have any equity because you sell your house in a short span of a few months after buying it then you don’t have to pay anything in equity, just the original loan.
Higher cost counties have higher income limits therefore requiring you to pay more in equity.
How Does the Calhfa Dream for All Program Work and Is it Beneficial to Bakersfield Real Estate?
Calhfa has multiple approved lenders. If you want to get into a new home in Bakersfield we suggest getting a lender first.
Next, the lender provides you with a letter of approval after which you can apply for the program.
You wait for the Calhfa portal to open. It could take a while since no one knows when it will open.
Once the portal is open applicants can upload their application along with the approval letter and ta-da you are halfway there.
Next, the state does a screening process and gives out vouchers via a lottery system. The lender then helps the purchaser to find a home in their target county within a limited time frame.
If by chance you are unable to find a home your voucher is no longer applicable and your money is reissued.
Check out the Bakersfield Real Estate Update from Last Month.
Expected Market Improvements – Bakersfield Real Estate
Even if the FED fund rates do not decrease you can expect market improvements. How? If the inflation data is according to the expectation of the FED you will start to see numerous improvements.
So if you are considering buying commercial property in Bakersfield or just a new home in Bakersfield real estate, you can consider all these facts and make an informed decision.
