The Bakersfield, Calif., home market was on track to finally retake the peak it achieved during the housing bubble.
In February, the city's single-family median home-sale price rose to $259,000 from $252,000 in January. It rose again in March to $260,000, and during the first three months of April stood at $282,000, according to numbers provided by local appraiser Gary Crabtree.
With a seller's market in full swing, the summit was in sight. An additional $18,000 and it would have matched the $300,000 height the market hit in 2005.
"We were expecting 2020 to be a really great year, and spring is the time when most people are holding off to list their homes. And then — boom! — this happens," said sales agent Ronda Newport, president of the Bakersfield Association of Realtors.
It's still too early to say whether the coronavirus crisis will bring down the local home market. But observers say things are looking better than expected.
They say buyer demand remains strong, especially for entry-level homes. The local inventory of homes for sale continues to be very low, along with interest rates, and properties are still fetching multiple purchase offers.
Weighing against those factors, however, are profound economic challenges. Not only has the crisis wiped out thousands of local jobs across several industries, but the region's most influential sector, oil production, suffered a major, prelockdown price decline that shows no sign of recovering in the near term.
"Things were kind of looking good until COVID hit," Crabtree said, referring to the disease caused by the new coronavirus.
People in the business say higher-end homes are selling slowly lately but that those priced below $300,000 are going fast.
Another trend Newport and Crabtree have noticed is that investors who bought locally during the Great Recession, only to fix up and rent out their new properties, are finally beginning to sell them.
Bakersfield broker and investor Frank St. Clair said he expects oil field layoffs and the coronavirus crisis to bring about a decline of perhaps 10 percent in the city's sales-price median during the next few months.
But he remains bullish about entry-level homes. Many people with jobs in construction and agriculture continue to work during the crisis, he noted.
Even though fewer people are showing up at property showings lately, there seem to be plenty of buyers out there, St. Clair said.
The market has slowed, he added, "but it hasn't stopped."
Newport recalled a recent situation that she said gives her hope that the local home market is holding strong.
A 1,273-square-foot home one of her clients had an eye on in northwest Bakersfield recently attracted no fewer than 14 offers.
The three-bedroom, two-bath property on Fairmount Park Drive was put up for sale March 3 and closed exactly four weeks later at $253,000. The property is being rented out to tenants, Newport added.
In another example of continuing market strength, she said a home on Battaglia Drive in southwest Bakersfield was about to be purchased by an investor who suddenly backed out. Days later, the property was back on the market attracting interest from different buyers.
"It doesn't take long," she said. "There's plenty of buyers out there."
The next month or two will tell whether the market remains strong, she said. That's because many of the homes sold this month were in escrow before California's stay-home orders were issued March 19.
Crabtree said he's less worried about the coronavirus than he is about oil prices; When the lockdown is over, most people may go back to work, but not oil field workers.
A key driver of home-price increases these days, Crabtree said, is the city's limited inventory.
Data he monitors indicates homes listed for sale last month totaled 746. That's an increase of more than 7% from February, but it's also a decline of more than 17% from a year earlier.
Another important factor is relative affordability, and that plays to Bakersfield's strength.
A little more than half of Bakersfield residents can afford to buy a home in the city, Crabtree said. Across the state, the figure is just 36 percent, suggesting homebuyers unable to afford a home elsewhere in California may come looking in Bakersfield.
