Riverside - San Bernardino Investment Property Market

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 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 Riverside-San Bernardino at the top of the list for expected home price appreciation (HPA) across all U.S. markets.

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), Riverside-San Bernardino continues to show strength on all fronts.
  • HPA and Rent growth: Some of the strongest home price and rent growth forecasts in the nation
  • Gross yields: Among the highest in California
  • Decreasing negative equity and foreclosure rates, which both support home values in the market
  • Higher crime rates than the U.S. average
  • Home prices closely tied to economic performance of the shipping, manufacturing and agricultural industries
  • San Bernardino County is the largest county in the Lower 48 states. It's larger than many states and even many countries.
  • Mount San Gorgonio, which is located in the San Bernardino Mountains is the tallest mountain (11,503 feet) in Southern California. On a very clear day you can see it from downtown Los Angeles and by the beach in Santa Monica.
  • The first McDonald's and the first Rolling Stones US concert were both in San Bernardino.
  • 1 Zillow
  • 2 John Burns Real Estate Consulting, May 2016
  • 3 John Burns Real Estate Consulting, May 2016
  • 4 Pitchford, Phil; Miller, Jim (November 28, 2007). "$1.7 billion allotted to five-county region for highway, rail projects". Press Enterprise.

Real Estate Investment Insights

Investment Style: High Appreciation
While each property will differ, this market is more likely to have properties where the value of the property is likely to increase over time.
Inventory:
Home Value *
$315,200
$189,400
National Avg
Home Value Growth (YoY)
7.0%
5.5%
National Avg
Rent **
$1,734
$1,403
National Avg
Source: Financial data from Zillow includes single family, condo & cooperative homes, updated on 11/7/2016
Job Growth (YoY)
2.3%
1.7%
National Avg
Household Growth (YoY)
2.1%
0.9%
National Avg
Estimated Months of Resale Supply
4.5%
4.6%
National Avg
Household Income
$56,400
$57,541
National Avg
Supply, Demand & Affordability data includes single family homes only, updated on 11/7/2016
  • Arrows indicate the directional change since the last update. No arrow indicates that there was no change in the data or no previous data is available.
  • * Home Value: includes all types of housing, including primary resident, condos, investment properties, etc.
  • ** Rent: includes all rental properties, including Single-Family Homes, multi family units, etc.
Help