Current Inland Empire Market trends
The Inland Empire (IE), encompassing Riverside and San Bernardino counties, continues to be a dynamic and evolving real estate market as of March 2025. Despite broader economic fluctuations, the region has demonstrated resilience, marked by steady home price appreciation, shifting market dynamics, and ongoing challenges related to affordability and inventory.
3/6/2025
The Inland Empire (IE), encompassing Riverside and San Bernardino counties, continues to be a dynamic and evolving real estate market as of March 2025. Despite broader economic fluctuations, the region has demonstrated resilience, marked by steady home price appreciation, shifting market dynamics, and ongoing challenges related to affordability and inventory.
Current Market Trends
Home Prices: As of January 2025, the median sale price for homes in Riverside reached $640,000, reflecting a 4.9% increase compared to the previous year.
Similarly, Riverside County reported a median home price of $628,000 by the end of 2024, indicating sustained growth in property values.
Sales Activity: The number of homes sold in Riverside showed a modest year-over-year increase, with 118 homes sold in January 2025, up from 116 in January 2024. However, homes are now spending more time on the market, averaging 55 days before sale, compared to 42 days the previous year.
Inventory Levels: The region continues to experience tight housing inventory, contributing to sustained competition among buyers. This scarcity has been a significant factor in the ongoing appreciation of home prices.
Factors Influencing the Market
Mortgage Rates: Elevated mortgage rates have impacted affordability, leading to a slowdown in sales activity compared to previous years. Buyers are facing higher borrowing costs, which affects their purchasing power.
Affordability Challenges: The Inland Empire has been identified as one of the most overvalued housing markets in the nation, with mortgage expenses consuming approximately 67.8% of per capita income. This situation underscores the pressing affordability issues facing residents.
Population Shifts: While major California metro areas like Los Angeles and San Francisco have seen population declines, the Inland Empire's more affordable housing options have attracted residents, contributing to population growth in the region.
Industrial Real Estate Outlook
The Inland Empire's industrial real estate sector is experiencing a nuanced landscape. Despite a decline in demand, warehouse leasing prices remain high, driven by limited new construction and constrained supply. Average rents have increased by 4.5% from the previous year and 61% compared to 2019.
However, uncertainties persist due to global economic challenges, including trade disputes and geopolitical concerns, which may impact future demand for industrial space.
Looking Ahead
Forecasts for the Southern California housing market in 2025 suggest a moderation in home price appreciation, with growth rates potentially declining to the 2-4% range. The housing supply is expected to increase gradually, offering more choices to buyers. However, interest rates are anticipated to remain elevated, continuing to influence affordability and buyer behavior.
Conclusion
The Inland Empire's real estate market remains robust, characterized by steady home price growth and persistent demand. However, challenges such as affordability constraints and limited inventory continue to shape the market dynamics. Prospective buyers and investors should stay informed about these trends and consider both the opportunities and challenges present in this evolving landscape.