High Expected Home Price Appreciation and Strong Rental Growth Forecasts
In addition to strong HPA forecasts for the Riverside-San Bernardino market, rent growth is expected to keep pace as well. We estimate
that rents will increase approximately 12% over the next four years, which should support relatively high yields and ongoing rent increases.
Another factor that makes Riverside-San Bernardino a great Single-Family Rental (SFR) market, is that it is among the top gross yield markets
in California. While gross yields in California are below the US average (driven by the higher prices of homes in the state), Riverside-San Bernardino's
gross yield of 7.6% is above the state's average of 6.5%3.
One unique factor about the Riverside-San Bernardino market is that it garners significant interest from large manufacturing and shipping companies given
its proximity to the Port of Los Angeles. In fact, more than 80 percent of the state's imported cargo is shipped through the Los Angeles/Inland Empire
Corridor4. In addition to the vast shipping volumes that move through the region, agriculture is also a large industry in the region and
generates nearly $2B in revenues to the region annually.
When it comes to underlying fundamentals that drive SFR investment returns (job growth, household growth, income growth, and housing supply), the San Bernardino-Riverside investment housing market continues to show strength on all fronts.
Riverside-San Bernardino Property Market Overview
Riverside-San Bernardino, also known as the Inland Empire, is the 13th largest metro area in the United States with a population of approximately 4.35 million people. The San Bernardino and Riverside investment housing market has experienced significant recovery since the recession with home values increasing over 85% since 20121. However, home values still remain over 30% below the prior peak and are expected to increase an additional 13% by 20192. This puts the San Bernardino-Riverside investment housing market at the top of the list for expected home price appreciation (HPA) across all U.S. markets.