When will prices drop in the Bakesfield, California area?

[Account Closed]

Bakersfield is known for being one of the cheaper mid-sized cities to buy in, in California.  However, prices continue to rise, even as the lack of water is causing surrounding farmland to be fallowed, and the price of oil has slammed to the ground.  

There is much job loss due to both items above, yet in certain areas, including SouthWest Bakersfield, the prices continue to rise.  Any idea why this is?

[Josh Justiniano]

Bakersfield actually has a pretty diverse economy. There is a lot of transportation and a lot of warehousing which is doing OK right now. 

The lack of affordable housing in California is also to blame.

A few months ago I was using the same logic as you are, regarding pricing, but as other parts of CA become out of reach for the normal person, many people I feel will start buying in more affordable areas, like Bakersfield or Fresno.

I have noticed margins on flips and rentals are drying up as other investors dive into the area. I've been doing direct mail out there for a very long time, and noticed people are now starting to get many pieces. 

My opinion, get used to steady rising prices, and get used to smaller yields on flips and rentals in Bakersfield, because I don't think it's going to slow down for a while.