Why Bakersfield?  Why Now?
05 Mar

Why Bakersfield? Why Now?

The economic and population growth in this particular region appears to be on the upswing. There are several reasons for this.

Oil Industry

OilKern County is the oil “Capital” of North America. We currently drill, produce, and refine a high percentage of the oil that the US exports. The Monterey Shale Oil Deposit (Owned by Occidental) is one of the largest known oil deposits in North America.

Comprising two-thirds of the United States’ total estimated shale oil reserves and covering 1,750 square miles from Southern to Central California, the Monterey Shale could turn California into the nation’s top oil-producing state and yield the kind of riches that far smaller shale oil deposits have showered on North Dakota and Texas.

Retail Distribution

Kern County is located in the very center of California based on population density. It is a prime location for the distribution of good across the state. Recent regulations to the trucking industries, (which limit the time shift a driver can work), have greatly affected the way manufacturers distribute their goods. A Kern County based distribution center can deliver goods to any high populated region of the state, unload, reload, and transport goods back in one shift.

The geographic advantage of this has recently brought several large corporations to the area. Target recently built in excess of 1 million square foot distribution complex near Shafter. Ross Dress for Less is currently building a million plus square foot “fulfillment center” right next door to Target. This “fulfillment center” is estimated to generate over 1500 jobs alone. A “fulfillment center” is a distribution center that ships product directly to the consumer based on “online purchases”. E commerce has been coined by many as the future of retail. What better place to build one of these centers?


With the population growth to be expected, the construction field has also boomed. The vacancy rate for industrial properties has diminished from 10% in 2011 to 2% in 2013. This creates a high demand for industrial type properties. The need for finished lots generates the demand for construction. Construction means more jobs.

Absorption Cycle

With a 2% vacancy rate in apartments, and less than that in single family residences, the demand for rental housing has entered a cycle of increasing demand and rents, while decreasing vacancy. This drives the price of the rental properties (apartments and houses) up as well. During the Absorption Cycle is the best time to buy real estate. The next phase/cycle will be Expansion. However, the Absorption Cycle should be a long one because of the new jobs and demand for housing. This is true in the Industrial property types and the absorption is from businesses moving to Bakersfield


So Why Bakersfield?

  • Retail distribution multi-modal shipping
  • New jobs being created by large oil companies expanding their operations in Bakersfield
  • Service providers that have moved into the area
  • New oil fields recently discovered are driving the expansion in the Industrial real estate market jobs created thereby are driving the housing market
  • 36% of the homes purchased last year in California were over $500,000, and the median price home in Bakersfield is approximately $286,000.
  • California’s unsold inventory reached a record low in September 2013 at 3.6 months. Bakersfield’s unsold inventory is 1.5 months.

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