Inland Empire Multifamily Report – Summer 2020
Communities across San Bernardino and Riverside counties fared relatively well, with some fundamentals surpassing U.S. averages through the health crisis.
The Inland Empire’s rental segment showed signs of vigor during the first three months of the pandemic. Sustained demographic expansion, limited supply and high demand kept rent growth positive, with the average rate up 0.1 percent on a trailing three-month basis through June. Meanwhile, the occupancy rate in stabilized properties slid to 95.5 percent as of May, down 0.6 percent in 12 months.
Job growth turned negative for the first time since early 2011. All sectors posted year-over-year contractions, with unemployment rising from 4.1 percent in January to 14.7 percent in April and 15.1 percent in May. Between mid-March and mid-July, nearly 6.6 million Californians filed unemployment claims. Leisure and hospitality shrunk by 44 percent, while trade, transportation and utilities—the area’s main economic driver—contracted by 8.4 percent. On the plus side, Moreno Valley authorities approved the World Logistics Center project, a 41 million-square-foot warehouse complex, for the second time.
Transaction activity slowed considerably in the first half of 2020, totaling only $232 million. Meanwhile, development powered through, and 1,742 units came online. Another 2,849 units were underway as of June. Considering the pandemic’s impact, we expect the average rent to fall 3.4 percent in 2020.