Inland Empire, CA

Market Update

The Inland Empire continues to experience steady population growth, with a current population of approximately 4.74 million, reflecting a year-over-year increase of 1.2%. This growth trajectory has been consistent since 2021, when the population was about 4.65 million. The region has also seen a net migration of nearly 26,849 individuals, contributing to a diverse demographic landscape. With a median household income of $91,013 and an unemployment rate of 5.7%, the economic fundamentals support housing demand. The renter share stands at 34.2%, indicating a significant portion of the population is engaged in the rental market, further driving demand for multifamily housing.

In terms of multifamily fundamentals, the median gross rent is reported at $2,006, with year-over-year rent growth of 3.8%. This growth aligns with the broader trend of rising rental prices, as evidenced by the HUD Fair Market Rents for various bedroom types, which are generally lower than market asking rents. The asking rent for a two-bedroom unit is $2,306, suggesting that while rental prices are increasing, affordability remains a challenge for many residents in the region. The current rent growth rate is slightly above the national median of 3.5%, indicating a robust rental market.

Capital markets in the Inland Empire show a multifamily cap rate of 5.87%, which is approximately 117 basis points tighter than the national median of 7.04%. Over the trailing 24 months, there have been 482 transactions with a total volume of about $810 million, resulting in a median price per unit of $231,905, which is about 16% higher than the 50-market median. This performance reflects a strong investment appetite in the region, supported by favorable demographics and economic indicators. CBRE Research reports that the multifamily sector remains resilient, suggesting continued interest from investors in the coming quarters.