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Market Report

Riverside-San Bernardino Multifamily Investment Forecast

4Q 2020

Apartment Sector’s Strength a Bright Spot During Volatile Times; Suburbanization Expectations Prompt Investment Activity

Region ranks as top-performing apartment market. The increase in Southern California households relocating to areas of reduced population density and lower housing costs during the health crisis is reflecting on Riverside-San Bernardino rental demand. From July to September, apartment vacancy compressed by triple-digit basis points, reducing availability to 2.5 percent, the lowest vacancy rate among major U.S. metros. Robust demand was recorded across all multifamily tiers during the three-month span as Class C availability fell to a record low and Class A and B rates dropped to their lowest points since early 2000. These conditions enabled the market’s average effective rent to climb by nearly 4 percent during the third quarter. With less than 500 units slated for delivery before mid-2021 and additional outmigration from coastal metros likely, tight conditions are positioned to continue, potentially fueling a rise in project proposals.
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