INLAND EMPIRE REAL ESTATE MARKET INSIGHT
Key takeaways from CAR Chief Economist Jordan Levine’s briefing — and what they mean for buyers, sellers, and investors in the Inland Empire.
If you follow commercial or residential real estate in Southern California, you already know the market defies simple explanations. At a recent briefing hosted by West End Real Estate Professionals, California Association of REALTORS® (CAR) Chief Economist Jordan Levine laid out a nuanced picture of where the market stands — and where it’s heading. Here are the most important insights for buyers, sellers, and investors in the Inland Empire, San Bernardino County, and the greater Southern California real estate market.
The Gap Between Public Perception and Market Reality
One of the most striking points in Levine’s presentation: consumer sentiment is currently at or below levels seen during the 2008 financial crisis — even though unemployment sits around 4.5% and the stock market has been at record highs. That’s a major disconnect.
The culprit? Misinformation. Levine calls it a “communications challenge.” Too many potential homebuyers are sitting on the sidelines because of inaccurate beliefs about the housing market — things like inflated down payment requirements (one survey found over half of California renters believe they need a 50% down payment to buy), fears of foreclosure waves that haven’t materialized, and anxiety over interest rates that may never return to pandemic-era lows.
The opportunity for savvy buyers: while others hesitate, the market continues to move. Waiting for the “perfect conditions” has historically cost buyers more than acting with good information.
Inland Empire and Southern California Housing Market Trends
The Inland Empire real estate market — including San Bernardino County and parts of Riverside County and Eastern Los Angeles County — is performing in line with statewide averages, with one important nuance: the market is increasingly segmented by price.
Higher Price Points Are Outperforming
The threshold for robust market activity has risen steadily. Properties around the $2 million mark are currently showing the strongest demand, driven by high-income earners, asset-heavy investors, and professionals in remote-friendly, high-paying roles (think AI engineers and executives). This segment remains largely insulated from interest rate pressure.
Long-Term Appreciation Is Structural, Not Cyclical
California home prices have consistently trended upward over the long term — and the reason is structural. Three forces drive it:
- High population density with ongoing demand
- A robust, diversified state economy
- A chronic shortage of housing supply
Even when interest rates nearly tripled in 2022 (from 2.85% to 8.25%), California home prices held their value. That kind of market resilience is rare and speaks to the fundamental strength of real estate as a long-term investment in this state.
Why Inventory Remains Tight — and What That Means for You
Here’s a dynamic that often surprises people: active listings are low not because homes are flying off the market at record pace, but because fewer new listings are coming online. Why? Approximately 62% of California homeowners hold sub-4% mortgage rates. Moving means giving that up — and taking on a new loan at today’s rates. Combined with Proposition 13 property tax protections and capital gains considerations, homeowners are choosing to stay put. People are living in their homes three times longer than they did a generation ago.
The result for buyers: don’t expect a flood of new inventory or desperate sellers. Competition remains real. Offers need to be strong and realistic.
The result for sellers: this is still a favorable time to list. Tight supply means motivated buyers. Proper pricing and presentation (professional photos, staging, pre-listing prep) remain critical to attracting the right offer.
The Stock Market Risk — and the Real Estate Opportunity
Levine flagged an important macro signal worth watching: the S&P 500 is currently trading at approximately 42 times earnings, compared to a historical average of around 15 times. That level of overvaluation historically precedes volatility or a correction.
For real estate professionals and investors, this creates a strategic opening: high-net-worth individuals holding overinflated stock positions represent an untapped pool of potential buyers and investors. Presenting real estate — particularly commercial and industrial real estate in the Inland Empire — as a stable, tangible, cash-flow-generating alternative is a compelling conversation to have right now.
The Homeownership vs. Renting Wealth Gap
This point deserves a direct conversation with every client who is renting by choice. Levine framed it simply: homeowners build wealth; long-term renters largely do not. High-income renters who treat housing as a subscription — spending discretionary income on experiences and goods rather than building equity — are missing the primary vehicle for generational wealth in America.
Homeownership builds equity over time, provides a hedge against inflation, and creates financial stability that enables other goals: business investment, retirement planning, legacy building. For buyers who can qualify, the question isn’t whether to buy — it’s how soon.
Homeowners’ Insurance: The Rising Cost Factor to Plan For
One challenge gaining momentum in California: homeowners’ insurance premiums are expected to rise substantially. The current regulatory environment has kept rates artificially low, making it unprofitable for carriers — which is why many have exited the state. As the market corrects toward profitability, buyers and owners should budget for significantly higher insurance costs in the coming years. This is a real consideration in deal underwriting and long-term ownership planning.
What to Expect in the Near Term
The outlook is cautiously optimistic:
- Home prices are not expected to decline; the long-term trajectory is upward.
- A modest 2% increase in transaction volume is projected, though the current pace is running behind.
- Interest rates are unlikely to return to pandemic lows; 6% is increasingly treated as the new normal.
- Sellers who price correctly and present their properties well will find motivated, qualified buyers.
- Buyers who act on accurate information — rather than fear-driven headlines — are better positioned than those waiting for a market that may never arrive.
How I Can Help You Navigate This Market
I’m Ray Adams, a commercial real estate agent with Elevate Real Estate Agency, serving the Inland Empire, San Bernardino County, Riverside County, and Eastern Los Angeles County. My background spans commercial real estate transactions, industrial and operational properties, land entitlements, permitting, and compliance — and I bring that operational expertise to every client I work with.
Whether you’re a business owner evaluating a commercial property, an investor exploring NNN leases or industrial warehousing, or a church or nonprofit looking to expand into the right facility, I’m here to help you make a confident, informed decision.
Let’s connect: DRE License #01416838 | Elevate Real Estate Agency | Rancho Cucamonga, CA
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