Demand for New Homes Prompts Large Investment in Vacant Property in Southwest Bakersfield
BAKERSFIELD, Calif. (Bakersfield.com) – In another sign of strength in Bakersfield’s housing market, a local real estate investor recently purchased land approved for development of more than 560 single-family homes in the city’s deep southwest.
The two lots included in the transaction comprise 158 acres, making it one of the largest such deals in recent years, local observers say.
But how soon construction will begin on what’s now farmland is anyone’s guess. Although new homes are selling relatively quickly these days, city officials have received no indication the new owner wants to build in the near term. The properties were originally approved for development in 2006.
The buyer, The LandStone Cos., couldn’t be reached for comment Thursday afternoon. But a co-owner of the company that sold the properties last month, Los Angeles-based Global Investment and Development LLC, said timing of construction is “the million-dollar question.”
“It remains to be seen” when development will proceed, said Global Investment’s co-owner, Aaron Rivani. He added that the company sold the properties in order to pursue a different business opportunity and that the land fetched a few offers and sold relatively quickly.
The properties in question are immediately northeast of the intersection of McCutchen and Gosford roads. They’re located north of the Kaiser Permanente Sports Village, on the other side of a city sewage treatment plan equipped with foul odor-control equipment.
City Councilwoman Jacquie Sullivan, whose Ward 6 includes the properties, had been unaware of the sale but was encouraged by it, saying single-family home construction puts people to work and widens access to homeownership. She noted people didn’t live in that area until relatively recently.
“At one time that area would’ve been considered to be way out of town and now it really is not,” she said.
Bakersfield Planning Director Paul Johnson said the property is zoned for residential and approved for 566 homes. He noted that development of the properties isn’t constrained by the Williamson Act, which limits development of farmland.
He added there’s no sign when construction might start.
“We’re waiting,” he said. “It’s all on the property developer right now.”
Bakersfield appraiser Gary Crabtree, who tracks the local housing market, said the properties appear to be part of a trend in which land approved for construction during the housing boom of the early 2000s is gradually being developed.
At one point there were more than 32,000 “paper lots” available for residential construction in 2005 but that number is much smaller now as homebuyers quickly snap up newly built homes.
Scott Thayer, senior vice president of homebuilder Castle & Cooke, said home developers are looking for land to build homes on and that the properties Global Investment sold represent a substantial size transaction.
But he, too, was unable to say how soon it might make sense for the new owner to move forward with construction. He said many available lots have been built on and so at some point the time will come to build on the lots.
“It certainly is closer than we were 10 years ago,” he said, adding he hasn’t seen a larger purchase recently of land approved for residential development.
A Santa Barbara broker who worked on the deal, Matt Power of Orange County-based Land Advisors Organization, said most such deals lately have been for 100 lots or less. It’s probably been two years or more since he saw a transaction involving more than 560 lots, he said.
Bakersfield real estate agent Jeanne Radsick, president of the California Association of Realtors, said there’s pent-up demand for what she called “move-up homes” in Bakersfield, which are properties bought by people who have previously owned a house.
She said the properties are in a “great location,” in part because they’re near schools and shopping options.
“I think this is a fabulous place to be,” she said.