Why this matters: Informed brokers and agents are better prepared to serve their clients and represent themselves as experts in their community when available data gives direction to their practice, especially during times of uncertainty within their local real estate market.
Homeownership set to stumble
Riverside is the fourth most populous county in California, with over 2.5 million residents. Much of the region’s population growth took place during the Millennium Boom years when construction, jobs and new home sales skyrocketed.
But the 2008 recession left the region with deep losses in home sales volume, construction starts and employment. Riverside’s economy remained in a state of prolonged recovery for a full decade, slowly gaining momentum as lost jobs were painstakingly regained.
Riverside’s economy fully recovered all jobs just as the 2020 pandemic recession sent unemployment above the Great Depression period. The good news is the Riverside region caught up with 2020 job losses much more quickly, with jobs exceeding the pre-2020 peak in the first half of 2022.
The pandemic economy of 2020-2021 distorted sales transactions, inflating both sales volume and pricing of sales and rentals of all types of property until mid-2022. Mortgage rates were deliberately set at historic lows during the pandemic period as the Federal Reserve stepped up to fund the entire mortgage-backed bond market as the lender of last resort when Wall Street froze financially.
But the pandemic recovery pace began decelerating in 2022, resulting in jobs growing an anemic 1.3% in 2024 over the prior year.
The lack of ownership turnover in the pandemic period resulted in a strangled MLS inventory which accelerated property prices to even greater unsustainable heights. In 2025, the low level of inventory is slowly building up for the annual spring homebuyer season as turnover ticks up while buyer demand is flat at best, signs the market may have begun the pricing correction proffered by a recession.
The current inventory trend and government economic policies in a trade war, now deeply rooted in worldwide confusion, suggest prices in the next couple of years are likely to fall. Local sales agents can expect Riverside’s sales volume in all types of property to continue to slip annually and induce a drop in property prices in the next few years.
Declining prices will likely bottom next around 2027 or 2028, brought on by the initial arrival of speculators and investors to provide a short-term pick up in sales volume and a price bump. Prices start to rise consistently over several months when buyer-occupants sense a pricing bottom has set in and they return to buy, as they do in every recovery period.
Also, expect downward pressure on prices for all types of property due to a rise in the cost of mortgage funds to be expected during the decade ahead.
View the Riverside regional charts below for details on current activity and forecasts for its local housing market.
Updated May 12, 2025.
Home sales volume slows
Chart update 5/9/25
| 2024 | 2023 | 2005: Peak Year | |
| Riverside County home sales volume | 25,000 | 24,000 | 68,100 |
*firsttuesday’s projection is based in part on monthly sales volume trends, as experienced so far this year.
Home sales volume in Riverside County is stuck around 3/4th the heights seen in 2019 during the last normal year before the pandemic recession. Starting in 2020, sales volume took on a more volatile path, matching much of the rest of the state in terms of Pandemic Economics. After peaking in 2021, 2022 home sales volume slid 23% below 2021. 2024 sales volume sunk 28% below 2019.
Dragged down by the double whammy of rapidly rising mortgage rates since January 2013 and fast rising property prices, homebuyer enthusiasm waned significantly due to lost expectations. Today, sales volume is trending flat with a downward influence for 2025-2026. Home sales volume year-to-date is 2.2% below a year earlier as of March 2025. Worse, compared to 2019, sales volume is 16.5% lower in Riverside.
Builders facing trade taxes on materials and a reduction in the migratory labor force are not likely to get excited about building SFRs at any rate beyond completing starts underway. The last experiment in trade war taxes suggests a steep drop in property sales of all types, together with a huge adjustment in pricing driven down by the declining need for property to house people and businesses.
The sudden destabilization of both immigration and trade instantly began keeping international buyers and travelers away. Thus, property sales volume to a global market in 2025 will not be achieved to the extent of previous years. Beyond 2025, sales to international buyers are a pure guessing game until consistency returns to immigration and trade tariffs for mutual benefit. Arriving Russians and Ukrainians fleeing the conflict are an exception.
Reaching a real estate recovery requires prices to adjust to their long-term average and end user demand to be buttressed by an increase in the number of jobs paying a sufficient salary to support the adjusted pricing of ownership and rent. At this point, expect 2028 to be the most likely year for a recovery period to take California real estate out of the shadow real estate recession that commenced in 2022.
Inventory rises from historic lows
Chart update 5/9/25
| March 2025 | March 2024 | Annual change | |
| Riverside County for-sale inventory | 16,400 | 12,100 | +36% |
Multiple listing service (MLS) inventory has risen from the historic low reached at the end of 2021. After plateauing in 2023, for-sale inventory in Riverside at the start of 2025 averaged a significant 36% above a year earlier. However, today’s inventory being lower than pre-2020 is not due to an overabundance of buyers.
Rather than increased buyer demand for ownership, it is owner reluctance to sell that held back the present growth in inventory for sale sufficient to keep prices from rising. The winter months typically see the lowest inventory of homes for sale, peaking around mid-year as the cyclical return of buyers takes place.
Looking forward, expect for sale inventory to rise in 2025, possibly a lot higher. As for-sale inventories grow the average length of time on the market is extended. Sellers are then forced to reduce pricing if they intend to attract mortgage-funded homebuyers back to the broker offices to acquire property rather than the much less common cash buyer.
The Fed’s fight to reduce consumer inflation while maintaining current employment levels is progressing irregularly. The current culprit is the chaotic trade war tariff disruption generating massive hesitancy all across the nation’s population. As a result, indicators point to a continuing downturn in the housing market activity until around the 2028 period. The blunt daily dramas of trade wars are contrasted by the Fed’s strategy for stabilizing the economy for acceptable levels of jobs and inflation requiring them to take a step, watch what happens, then repeat. All of this is disconnected in the minds of the consumer, who is unaware of history’s message about tariffs and the Fed’s task around consumer inflation and job stabilization.
The seller’s market developed after 2013 fully reversed by mid-2022 into a full-blown buyer’s market. The process of shifting from a seller market to a buyer market was introduced by its cyclical end to low mortgage rates which was the beginning of the now roughly 30-year half cycle of generally rising mortgage rates. This is not surprising for the agents who attended “adult” lessons in high school for financing.
Today, homebuyers increasingly take a wait-and-see approach to buying as they become more aware of the market conditions for future price reduction. The present global disruption in commerce has everyone’s attention. Thus, buyers are increasingly more attentive to real estate market conditions and becoming financially more cautious and less willing to buy without significant reduction in seller pricing or mortgage rates.
Turnover rates flounder following moratoriums
Chart update 5/9/25
| 2023 | 2022 | 2021 | |
| Riverside County homeowner turnover rate | 6.1% | 7.8% | 8.3% |
Riverside County renter turnover rate | 15.7% | 12.8% | 11.7% |
The percentage of Riverside County homeowners who moved in 2023, the most current figure, dropped from the previous year to continue the downward trend following the peak in turnover in 2016. The homeowner turnover rate fell to 6.1% in 2023 which keeps turnover below the level needed for a full recovery in home sales volume.
The renter annual turnover rate grew to 15.7% in 2023 from the previous year’s 12.8%, but they were not moving into California homeownership on the turnover. The 2023 rate of 15.7% is still below the 26% turnover of a decade prior in 2013.
Expect a consistent increase in the frequency of turnover to arrive throughout 2025 and 2026, unless trade wars freeze the bond market and thus mortgage funding prompting the Fed, as the last lender standing, to step in again to stimulate the economy.
Legislative and OAG efforts to force cities and counties to greatly increase the permitting of residential construction will eventually increase housing starts, likely dramatically when small builders figure it out. When job growth and wages stagnate, residents lack the confidence (and more importantly, often the financial ability) to move.
After a recession, the turnover rate will rise when employment begins a consistent recovery and wages improve sufficiently, likely sometime after 2028. The steady increase in jobs and wages boost confidence in the future of the economy and gradually reduce fears of carrying mortgage debt – after prices complete their downward adjustment.
Homeownership plummets
Chart update 5/9/25
| Q1 2025 | Q4 2024 | Q1 2024 | |
| Riverside County homeownership | 62.1% | 62.9% | 67.5% |
Riverside County’s homeownership rate fell steeply during the last recession but has since achieved the rare status among California counties of briefly clawing its way back to Millennium Boom levels.
For Q1 2025, the homeownership rate is 62.1%, slipping from 62.9% a year earlier. This is still significantly higher than the state average, which is 55.6% in Q1 2025.
The current post-covid rise in home prices due exclusively to a lack of property available for sale – resale and new construction – has forced a huge part of first-time homebuyers and turnover homeowner out of the market. The remaining buyers are cash-heavy investors and the few all-cash buyer-occupants with the upper hand.
The housing market bounce back from what is now a three-year real estate recession cannot be reliably forecast until the global trade wars settle down with durable tariff rates. Further, a loss of jobs is expected through the 2026 period, maybe beyond, due to uncertain business conditions, import taxes on foreign-sourced products and material for consumers and manufacturers, increased inability to export, diminished travelers, and other interactions.
As we continue through the current recession, increasing numbers of homeowners are falling behind on mortgage payments. A pile-on effect will force a sizeable share into a forced sale as their equity declines and goes negative during a drop in home prices as for-sale inventory balloons and jobs decline. Thus, expect the homeownership rate in the coming years to gradually decline from present levels, rising again in a recovery.
Related article:
The Fed bumps up rates again — the undeclared recession is here
Residential construction mixed
Chart update 5/9/25
| 2024 | 2023 | 2022 | |
| Riverside County single family residential (SFR) starts | 11,400 | 10,700 | 11,800 |
Riverside County multi-family starts | 3,300 | 7,400 | 3,800 |
Residential construction starts are relatively stable, with starts in recent years bouncing around within a 10% range in the Riverside Metropolitan area.
During the current housing cycle upturn beginning in 2011, multi-family starts peaked in 2023. In this elongated recovery period ending with the pandemic economy flameout, multi-family starts have fluctuated greatly every two or three years. They declined significantly in 2020 as the pandemic set in. Then bounced higher into the 2023 peak year before falling back in 2024.
In Riverside County, the focus on multi-family construction is far less pronounced than in regions closer to the coast, as its lower land cost keeps SFRs within reach of more households.
Meanwhile, single family residential (SFR) starts continue on a bumpy plateau, rising gradually in 2025. Looking at the first quarter of 2025, SFR are 7.5% higher than the same period last year. Multi-family starts continuing their huge swings are far higher for Q1 2025 at nearly 45% over Q1 of the prior year.
The next peak in SFR construction starts will likely occur in the post-2026-2027 period following resolution around in the uncertainties of labor force and materials cost from government trade wars and immigration disruptions. When the economy settles down residential starts of all types will have a significant boost from recent legislative efforts to increase California’s housing stock. Even then, SFR construction starts are not likely to return to the deregulated predatory mortgage-driven numbers seen during the hyperactive Millennium Boom.
Jobs near a peak after 20 years
Chart update 5/9/25
| March 2025 | March 2024 | annual change | |
| Riverside County jobs | 1,694,500 | 1,692,000 | +0.1% |
Before occupying end users can provide sufficient support for the housing market, they need to have reasonable assurance of a sustainable income — i.e., jobs with wages trending in excess of the rate of consumer inflation.
The number of individuals employed in Riverside County finally surpassed its December 2007 peak at the end of 2014, barely catching up by 2020 when factoring in the jobs needed for the region’s population gain. But the recovery from the 2020 pandemic recession was much swifter due to massive fiscal and monetary stimulus widely spread across the population.
Riverside was one of California’s first major metros to achieve a jobs recovery. As of March 2025, some 87,900 more individuals are employed in Riverside compared to the jobs peak when the covid pandemic hit . The recovery pace has rapidly dwindled, with the number of jobs held today in Riverside just 0.1% above a year earlier.
Expect a W-shaped recession pattern trending down in the coming months. In sympathy, jobs will bounce in starts and stops – or stops and starts – continuing in a declining trend, not to enter a recovery pattern until the undeclared real estate recession beginning in 2022 and the trade wars are behind us.
Industry employment falls slowly
Chart update 5/9/25
| March 2025 | March 2024 | annual change | |
| Real estate | 21,500 | 22,300 | -3.6% |
| Construction | 108,400 | 116,800 | -7.2% |
While many of Riverside’s top employing industries have yet to recover from the tsunami pandemic economy, the period was far been less damaging to the real estate industry in Riverside compared to other parts of Southern California. The different circumstances meaning less expensive homes with less population per acre inhabited, the perennial cheaper land situation compared to property in coastal counties.
The number employed in the construction industry is down 7.2% over the past year in Riverside. This figure presents a rapid decline from the prior year’s decline of 3.6% in the number of individuals employed in the real estate industry. Caution over a deep-rooted concern about anything real estate is on the minds of a constantly increasing percentage of Californians.
Expect the number of real estate professionals employed to see a decline in the coming years, the result of deteriorating sales volume and prices in 2025-2026. Construction workers will be somewhat shielded from today’s recessionary impacts, as, unlike during the lead-up to the 2008 recession, overbuilding has not been a problem in recent years. In fact, Riverside is in need of far more residential construction to keep up with demand from a shifting population from the coastal regions into the inland empire region.
Per capita income now parallels consumer inflation
Chart update 05/09/25
| 2023 | 2022 | Annual change | |
| Riverside County per capita income | $53,800 | $51,000 | +5.4% |
| California per capita income | $81,255 | $76,941 | +5.6% |
Per capita income in Riverside is one of the lowest in the state. Low per capita income holds down rents and, in turn, new multi-family starts. Annual income rose beyond 2008 peak year amounts in 2013 — and that’s before accounting for the purchasing power reduction brought on by interim consumer inflation. 2013 saw a huge asset inflation hit at over 30% for the year as mortgage rates bottomed at the lowest level since rates peaked 30 years early in 1983.
The average employed individual in Riverside earns just $53,800 according to the most recent Census reported year of 2023. The statewide average income is much higher than Riverside’s. Recently the annual income rise in Riverside was lower, 5.4% compared to the state average of 5.6% in 2023.
However, the average resident of Riverside spends less of their income on housing expenses than those living in urban coastal cities. In fact, some of the Riverside income rise is attributed to high income-earners moving to the bedroom community of Riverside in search of cheaper housing.
Jobs and the pay received by local residents is why homebuyer occupants ultimately determine selling prices. Buyers can only pay as much for an SFR (or apartment) as their savings, income and credit score qualify them to pay — nothing more, no matter the price demanded by sellers.
Expect per capita income to increase or decrease concurrent with increases or decreases in jobs. Through the fog of international trade chaos, look to 2027-2028 for the next significant increase in home sales volume and prices. If the world trade issues remain in conflict throughout 2025, we will most likely see job losses leading directly to forced sales as job-less owners avoid foreclosures for lack of sufficient personal income.
The next recovery period will be driven by the shifting demographic trends of retiring Baby Boomers and their Millennial and Gen Z counterparts who become homebuyers en masse following the coming jobs recession.
The truth is that what reigns nowadays here in California more than any other State is a disease called GREED! but that’s not all, there’s also a problem with the Morality of the people, it’s been decaying since many many years ago, thx to people that exaggerated their desires for pleasure and lust they also expose their wrath when envy invades their haughty way of slothy and gluttonous living.
greed is what ‘the church’ admonishes us about (while collecting its riches from us). The ‘disease’, the social structure, is capitalism. This is how capitalism works. It takes our minds, our lives, all our life is consumed with fitting into the for-profit schema. Church aids the state – as you know.
its not capitalism nor greed that caused these problems, its the opposite, the welfare state. government wanted everyone to own homes and some people aren’t responsible enough to own homes causing this vicious cycle of booms and busts. u either use it to ur advantage or u listen to daddy government and accept a expensive handout. learn supply and demand along with fluctuating interest rates.
Maybe I live in a different riverside then the posters above. When I was in college working part time at T-Mobile, I was making close to 50k… Now that I have graduated I work in newport beach which is a 45 minute drive from riverside through till roads …. I had the option to buy a condo in OC for 400k or buy a big house with RV parking for 380k… So guess what I ended up buying in riverside. Most of my co workers are moving into riverside for same reason. That’s why the home prices are going up. Home prices are not made for entry level workers or single individuals…it is fairly easy to make 50 to 60k with few years of experience….combine that with your spouse 60k you can easily afford up to 480k since the interest rates are so low…. So to prospective buyers out there, don’t pay much attention to naysayers …..
to Jay and everyone: this is rent – owned by our Owners – controlling our lives. The need to make profit. For one thing if we don’t have ‘enough’ we’ll be out on the streets with the other dis-housed people – especially in our old age. Try paying rent on social security.
What the Author of this article has not included is the TOTAL PICTURE of what is on the HORIZON. For example it was disclosed that California will once again SHUT DOWN OIL in the SANTA BARBARA CHANNEL where currently receive 33% of all of California’s oil, plus the fact that Congress just approved the ability of Oil Companies exporting oil for the first time in FOUR DECADES. That and the mere fact that the current occupant of Sacramento as the Governor,(Jerry Brown), will not change the fact that California charges the most for gas in the U.S. and even though he favors FRACKING for OIL (on his 2,500 acre ranch only) and the fact that California will be increasing minimum wage and the fact that California will be increasing the price of gas next year to $4.50 a gallon for Regular and the fact that Obamacare will be causing the unemployment rate to increase as well and the fact that interest rates will be increasing next year for real estate loans, I do not see how the economy will be improving for at least the next 3 plus years at the earliest.
I agree whole heartedly with your assessment. Until income increases, there will be NO real recovery. Furthermore nobody’s addressing the back door property tax increases that are being called ” special assessments ” (an end around to prop 13).
My wife and I have recently been window shopping at all the new construction homes for sale, and noticed that with the property tax and special assessment fees that a buyer could pay in ezcess of 2% in taxes. If you factor in HOA’s your looking at upwards of 1000.00 a month above the mortgage. Then factor in the 50k plus premium the builders are placing on new construction, I’m not sure how a person with an average salary of 36k in this county can afford it. So what I see is lower down payment programs, lower FICO rate qualifications. .. in short we’re opening up ourselves to another bust. Albeit not as large as 05-06, but most definitely sure to happen.
The officials in this state have put so much downward pressure on the middle class with high utility costs, fuel costs, “special assessments “… they can’t afford to live here, let alone retire here. The mega rich can endure this , the poor can’t even contribute to the tax base , so you will see a collapse in our local economy. Already I’ve seen a drop in resale prices of 10k-20k just in the past month. The other major factor to consider is job growth and traffic congestion. Jobs being created in the IE for the most part are not high wage jobs. The high wages jobs are primarily in OC, SD & LA and as we all well all know, those commute times have increased substantially in the past few years.
To all you Gen Y’ers & Boomers out there, my advice is plan on getting the heck out of this place within the next 10 years. There are much more beautiful and better places to retire then California. Ask yourself what kind of quality of life will you have. Good luck and GOD Bless.
Well said!
The job growth in the IE is due to minimum wage job increase. Why would you need to write an article stating the obvious – that home sale volume is directly tied to job growth, and job growth with real income growth, not minimum wage income. It was the NINJA subprime lenders that created the home boom/bust. The INSTITUIONAL cash buyers like Blackstone, wealthy Arabs and Chinese that were able to buy the distressed properties and REOs and they purchased them in bulk in the IE around 2010 thru 2012, Now they have put them on the market at double (or more) the purchase price. But wage growth is not able to support these listing prices. This is a sellers market for all tiers the problem is the low tier group dont have the wage growth to buy in the IE. The game is rigged I’m afraid….get out of CA as quick as you can!
I believe that sam’s comment is clarifying whats really going on in short. And the authors, who spent so much time writing this article, fail to take a moment to speak to his comment; which would help readers.
The article says Riverside County per capita income $33,278 per yr. According to Zillow’s qualifying calculator this income would only qualify a buyer for $107,000 house that is with a $20,000 dn payment. And your debt level can only be $250.00 a month.
At an annual income of $33,278 divided by 40 hrs a wk x 52=, 1,920 hrs per yr. Equaling $17.34 per hr for one person. Or divided by 2 = $8.66 per hr for two. This looks a little like minimum wage to me.
So it would take two minimum wagers to qualify for a $107,000 house. But there are no $107k houses. One can use these numbers and juggle them around anyway they want. You could double the income from $17.34 per hr to $34.68 per hr or $66,556 a yr and you still could only afford a $214,000 house. But houses are ranging around $250,000 house your income would have to be $60,000. It begs the question(s). Who’s buying these houses? Two nurses living together or who. How can these price arranges be?
What we have is a squeeze play. Interest rates will have to remain low in order to sell houses that are already to high. There aren’t enough high productivity jobs to support the high price homes. This is a consequence of sending productive jobs to China and Mexico, etc.,and the allowing of illegal aliens/Mexicans and their Babies to do the massive numbers of minimum wage jobs created by corporations, once they found out they could control the government, which allows the illegal aliens into our country.
one of the things that has been done is that the money in our country is no longer circulated in our country.
What we are experiancing
To summarize prices are over priced. Who can afford them? Are interest rates set low so that people can have a better chance of buying? Is a crash in the works again.
All this said, whats the purpose of this article?
The article should be emphasizing that the price of housing way to high. And the next question is who is responsible? Will there be another housing crash?
The whole thing is a viscous cycle, whereby China, Mexico, corporations, businesses, illegal aliens, (who make a fortune in our country as compared to Mexico), and other 3rd worlders all make money while true American Citizens are driven down! If I’m wrong please explain why so that I can see the “light”.
Your information is helpful. It only, really, raises more important questions, thoughts and ideas as I’ve posed above.
Technology is putting people out of jobs not people that want low wage jobs and come here. Just look around you at the tech that can do part or all of what people were doing. The other factor is 80 million boomers that companies feel are paid too much and want them replaced with younger cheaper workers and those same boomers will off load houses as the face retirement and health issues. There will be more renters than home buyers.
If you buy a house in Riverside county especially in rural ar es as you better be aware of every detail of that property. RIP Off Riverside county doesn’t even know where property lines are, they dont know if the land is developed or not. They are CLUELESS. We recieved a tax bill for undeveloped land, and wanting to do the right thing we advised the assessor that there was a house on this land. To make a long story short $10,000 later we had to 2nd our house. Now as we are trying to sell the county says our address doesn’t exist and that our property lines are all wrong. Of course we have to pay to find them. AVOID RIVERSIDE COUNTY LIKE THE PLAGUE.
Unfortunately you are right. Technology is replacing some jobs but not the ones being filled by immigrants. Construction, Landscaping, Food Service, Maid Service, just to name a few. Low cost immigrants have been taking these jobs at a pretty good clip for the last 30 years. Not just in California but the entire Southern States and Midwest. Lawn mowing and fast food jobs were primarily filled by young kids willing to work for extra money 30 years ago. Now these jobs are filled by adult immigrants who need money to live. This is why housing prices are outpacing wages. We are filling jobs with people who will work for less than a living wage. The divide between poor and rich is growing as a result. Liberals typically do not understand this dynamic in our economy and that is why it is getting worse. To talk like this will label you a racist or a bigot. Although there is nothing racist about it, Liberals like to use name calling and labeling as a weapon to make their points rather than relying on sound evidence for their arguments or listen to other viewpoints. Their answer is to legislate a “Living Wage” for our minimum wage. It sounds good except that it will increase prices 2 fold, if not more, which will further widen the gap between rich and poor. The problem is simple supply and demand. There are too many low wage and or low skilled workers in the labor force and more on the way. The only benefits are that Corporations profit and increase their bottom line which makes their stocks go up, and Government is adding a new tax base and voter block to vote for and pay for future Government dept. Only in America.
yeah – they don’t have vicious cycles in Cuba – didn’t in USSR. That’s why our Owners keep attacking them. If people get to understand that the for-the-people social set-up is beneficial, our Owners are out of business – as they were in those states. US attacks any-everywhere people rise up – to take their property out of Owners’ – profiteers’ – hands.
You know Cuba would long have gotten itself into better shape if the US hadn’t kept invading it –
Is there a way to separate out retirement communities from the overall residential real estate market? It seems to me that retirees are a market unto themselves and that buying group is growing very fast. I own a property in Heritage Palms.