Bakersfield--The Next Boomtown

According to Curbed, the city of Bakersfield, located in the middle of California–and some would say in the middle of nowhere, is showing signs of a development turnaround. “It’s like a California version of the New York versus New Jersey thing—but maybe worse,” says Austin Smith a Bakersfield boomerang who has begun developing projects in his hometown. “You’re so close to one of the biggest metro areas in the country, but never quite there.”

Since opening in 2016, the high-end three-story, 44-unit downtown development represents the first market-rate housing built in the city’s core in decades. It’s not every day the city gets new housing, complete with a dog park, fountains, and a fire pit. Now that the development is fully leased—not a small accomplishment for new housing asking the highest rent in town, at between $1,630 and $1,830 for a two-bedroom—its success has convinced Smith and his firm, Sage Equities Real Estate, to break ground later this year on a new 53-unit project downtown.

It helps in California to have housing that’s actually affordable. With a median home value of $241,000 as of last March, and median starter homes beginning at just $145,300 according to Zillow, it’s no surprise that the median age of a first-time buyer in Bakersfield is just 33. The city’s sprawling growth pattern has played a big role in creating cheap housing; as the city and metro region grew out, Bakersfield’s population ballooned from 70,000 in 1970 to more than 380,000 today.

According to NAR researcher Nadia Evangelou, these newly arrived millennials can afford to buy nearly 15 percent of homes currently listed for sale in Bakersfield, compared to only 4 percent in Los Angeles.“Millennials still move to big metro areas such as Los Angeles and San Francisco,” she says. “But we see that they don’t stay in these areas, because of weak affordability conditions.”