Bakersfield, CA long term

[Jack T.]

I've been looking at some properties in Bakersfield and am concerned about the long term prospects for the area. One example is the following article http://www.bbc.com/news/business-36595888 What are your thoughts? Is it a risky area? Calling out @maxgradowitz

[Max Gradowitz]

That article is BS.  People (all of whom are far removed from Bakersfield and do not see the booming businesses/industries here) keep talking about the oil industry causing a negative turn in property values and more foreclosures and all that jazz.  The hype surrounding it is largely unfounded. Have there been layoffs in the oil industries? Of course! I have lots of friends, family, and real estate clients in that industry. Half of them have kept their jobs, so it's made little/no impact to them. The other half have moved on to other industries that are still running strong. For example, a client of mine lost his oilfield job, so what did he do? He cashed out his 401k, bought a smaller house for all cash (didn't need a big 5 bedroom home anymore now that all of his kids were grown up and moved out), and rented out his older larger home for a profit. He lived off the rest of the 401k proceeds and rental profit for a month or two until he got a new job as a truck driver. That's what I've noticed in general, people just moving on to new, more reliable, industries.

Bakersfield is still much more affordable than the rest of California, and "big city" people know this and are still moving here and bringing their professions/occupations/skills with them.  In fact, I went to law school in San Diego years ago and just a few weeks ago I was in the courthouse in downtown Bakersfield and I saw a guy I went to law school with working as an attorney there!  I asked him how the hell he ended up here in Bakersfield, and he said "I applied at all the public defender offices in California and Bakersfield is the only one that had an opening and hired me.  I was weary about moving from the beach to the middle of central CA, but then I realized my mortgage payment would be a third of what it was in San Diego so I moved here and I've been really happy since."

Don't buy the hype about the oil industry killing the entire economy here in Bakersfield.  Rental properties here are still killing it compared to the rest of California, ask any savvy CA investor and they will tell you the same thing.  Nobody can predict the future, we aren't psychics, but everything I see and know points to the fact that Bakersfield is still a strong economy and property values will continue to appreciate in the short and long term.