Bakersfield, CA

So, where is the Bakersfield real estate market headed? That's a difficult question to answer because of the many variables that affect this market. Food and gas prices are increasing. We're headed into an election. Foreclosures are skyrocketing. We've probably seen the last of fed rate cuts.

All other factors aside, the biggest affects on the local market right now is foreclosures and short sales which make up over 50% of the listings and sales right now. Lenders are getting more aggressive with pricing which is forcing everyone to lower prices to compete.

Sale volume has been strong: there were 850 sales in Q1 2008 which is about the same as Q1 2007. Marketing times also remained similar: typically 2-4 months for competitively priced properties.

Prices are a differenct story. The average sale price in Q1 2007 was $319,371 and the median was $280,000, and in Q1 2008 the average was $247,180 with a median of $228,950. The total dollar loss in Q1 2008 versus Q1 2007 is over $70 million. The average per square foot price in Bakersfield has dropped from $196 to $135, over a 31% decline in 1 year.

The supply of homes for sale is down from the peak which was near 4,500 last year. Since October, the supply has declined from 14 months to just over 11 months. As the supply of available homes decreases, the decline in prices should slow, provided sale volume remains at least the same. If the flood of foreclosures and short sales decreases then we should start seeing prices stabilize and supply decrease, but if we continue at the current rate of defaults, values will continue to decline.

Regardless of what happens with foreclosures, one fact remains: prices have declined enough that they are affordable again. That means buyers are entering the market again which will eventually put an end to the housing crisis.

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The Bakersfield Real Estate Caravan looked at houses in Northwest Bakersfield today, between Allen and Coffee, North of Rosedale Highway.

In other news, I found out that the LA Times only posts articles on the public website for a week, so all the links I have been putting in my Bakersfield Real Estate blog are getting broken. I am going to rethink my strategy. Also, I think my blog about taking Local Honey to stave off hay fever has had an effect, because when I went back to the store, all of the Sage and Orange Blossom Kern Honey was sold, and only the Buchwheat Honey was left. One of our agents claimed he heard a rumor about Local Honey having a beneficial effect on allergies, and I can claim full credit for spreading that rumor.

Have a Good Friday, and a good weekend.

www.ChrisCraddockRealtor.com

March 17th, St Patrick's Day, and then two days later, the swallows return to Capistrano. Someone I know has a birthday on March 19th, so I incorporated a little of the Capistrano legend and lore into a birthday greeting. Did you know that the swallows fly all the way from Argentina? Legend has it that they carried twigs in their beaks, so they could rest in the water, using the twigs as little life rafts. Saw a great blog from the Real Estate agents of San Juan Capistrano, who tied the story into their observation that the buyers seemed to be returning along with the swallows. Though the evidence is anecdotal, and may even be apocryphal, here it is:

When the Buyers Return to Capistrano

The next day I went to the luncheon sponsored by REPERs (Real Estate Professional's Educational Resource) and The Bakersfield chapter of The Women's Council of Realtors at the Stockdale Country Club:

WCR Bakersfield (They haven't updated their website in a while. I wonder if they would let me in to their events for free in exchange for updating their website?)

The speaker was Liz Callihan, and she brought her Texas-sized wisdom and common sense to the subject of technology in Real Estate. Smart Phones, Texting, Blogging, Tablet Lap Tops, Mobile Printers, Miniature Digital Voice Recorders, Mobile Scanners, and 500 gigabyte back-up units were just a few of the devices she demonstrated.

Want to scan receipts on-the-go, and have the information automatically entered into your accounting software? Try this neat receipt scanner:

http://www.neatreceipts.com/

Use a digital voice recorder to capture ideas--or even write the Great American Novel. Then you can use Dragon Naturally Speaking software to type it up:

http://www.dragontalk.com/

Want to have a FREE phone number where you can receive faxes and have them sent to your email? Sign up for eFax:

http://www.efax.com/

Want the latest tech info, and also great how-to videos that show you how to set up and use all these great gadgets? Try cNet:

http://www.cnet.com/

Liz Callihan had many great tips and tricks that would benefit any Real Estate Agent, business person, or entrepreneur. She recommends that you put lanyards on your keys, and all of these gadgets, so you won't lose them. For smart phones, get ones with big keyboards, and big buttons. Not only are they easier to press the buttons without hitting the one next to it, you can also see them better.

The iPhone? More like iCandy--it looks good, but you can't really use it for business.

And Vista? When you buy a new computer they try to force it on you, but they've had so many returns and complaints that you can now demand Windows XP, and Microsoft has backed off and is now committed to supporting XP for at least 2 more years.

If your computer is slow and locks up if you try to run more than 2 or 3 programs at the same time, check your RAM (Random Access Memory). Right click on the My Computer icon, and then choose Properties. It will show you how much RAM memory you have. You might have a gazillion gigs of memory on your hard drive, but then you skimped on RAM memory. Liz compared the hard drive memory to a storage unit, and the RAM was a truck. When you want to use a program, it is loaded into RAM much like a truck picks up your stuff from the storage unit. If you have tons of stuff, but then try to move it with a little tiny truck, there is a bottleneck. You need a BIG RIG!!! 2 gigabytes of RAM memory will dramatically increase your computer's speed.

Liz Callihan dropped by our office after the luncheon to talk tech (minus the geek speak) with our sales manager, Nancy Harper, and I. She really has a gift for explaining how to use technology in plain English. Her engagement for the WCR is an annual event. Here is Liz Callihan's web site:

http://www.pfmgurus.com/

Another National Speaker on useful technology is Dick Betts. His website has a lot of useful information as well:

http://www.dickbetts.com/

Remember, The Key to Bakersfield Real Estate is Chris Craddock, Realtor.

http://www.chriscraddockrealtor.com/

ONE SALE - TWICE THE TAX BREAKS!

Sellers of farms and ranches are able to take advantage of two different tax code sections to minimize capital gain tax liabilities. By utilizing all the opportunities available in the tax code, many ranch and farm owners can meet their investment objectives and defer capital gain taxes! Often some of the property can qualify for tax exclusion under IRC §121 and the remainder can qualify for tax deferral under IRC §1031.

BENEFITS OF IRC SECTION 121

The 1997 Taxpayer Relief Act provided property owners significant tax advantages on the sale of a principal residence. IRC §121 allows a homeowner to exclude capital gain taxes if they meet the following requirements:

· Couples filing a joint tax return can exclude up to $500,000 of the capital gain on the sale of their principal residence, and single filers can exclude up to $250,000.

· The home must have been the primary residence of both spouses two of the last five years.

· The exclusion is available once every two years.

In addition, a property owner can obtain tax exclusion on the sale of vacant land, under T.D. 9030, if:

· The vacant land is adjacent to the land containing the taxpayer's principal residence;

· The property owner owned and used the vacant land as part of their principal residence;

· The property owner sells or exchanges the principal residence that meets the requirements of §121 within 2 years before or 2 years after the date of the sale or exchange of the vacant land;

· The requirements of §121 have otherwise been met.

WHAT IS AN IRC SECTION 1031 EXCHANGE?

Section 1031 of the Internal Revenue Code allows an owner of property "held for productive use in a trade or business" or "held for investment" to exchange for another "like-kind" property and defer paying capital gain taxes. Although there are some misconceptions, this does not require exchanging a ranch for another ranch since the definition of "like-kind" property is very broad. For example, a property owner can exchange out of a farm or ranch and acquire:

· Single family rental, duplex or triplex

· Apartment or commercial property

· Another farm or ranch property

· Vacation home primarily "held for investment"

WHAT IS NEEDED TO ACCOMPLISH THIS?

A good accountant or real estate attorney is often needed to determine the value of the residence portion of the transaction and the land used in the farm or ranch operation. An experienced "Qualified Intermediary" is essential to a successful exchange. Call the 1031 exchange experts at Asset Preservation to learn more!

The information provided is for educational purposes only. It is not legal or tax advice. Accordingly, the taxpayer should review the details of the specific transaction with taxpayer's own legal or tax advisor.