Riverside is the fourth most populous county in California, with nearly 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. Employment finally exceeded the number of jobs held prior to the Great Recession at the end of 2014, though it barely caught up with post-2007 population gain before the 2020 recession hit and more jobs were lost.

The good news is Riverside’s economy caught up with 2020 job losses much more quickly, with jobs exceeding the pre-2020 peak in the first half of 2022. But the recovery pace has crashed, with jobs growing an anemic 1.7% over the past year as of mid-2023.

Local sales agents can expect Riverside’s low inventory to rise heading into 2024 as the housing market continues to cool rapidly. Historically low interest rates and a shortage of sellers willing to list inflated home prices in 2021. But with 2022’s interest rate hike and sticky seller pricing, homebuyers’ options have quickly disappeared, causing home prices to fall (absent a transitory seasonal uptick in Spring 2023).

As we head deeper into the 2023 recession, expect home sales to slide through 2024, with home prices declining in the second half of 2023 through 2025. Home sales volume will pick up with the return of real estate speculators around 2025, a full recovery apparent with the return of end user buyers beginning in 2027.

View the Riverside regional charts below for details on current activity and forecasts for its local housing market.

Updated August 9, 2023. Original copy posted March 2013.

Home sales volume falls back

Chart update 08/09/23

202220212005: Peak Year
Riverside County home sales volume30,60039,90068,100

*first tuesday’s projection is based on monthly sales volume trends, as experienced so far this year.

Home sales volume in Riverside County remained mostly level in the years of 2011-2010. 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. Further, 2022 sales volume tumbled 12% below 2019, the last “normal” year for California’s housing market.

More recently, home sales volume year-to-date is a whopping 32% below a year earlier as of May 2023. Worse, compared to 2019, sales volume is 37% lower in Riverside.

As the housing market continues to plunge, some are pointing to the minor Spring 2023 price bump as evidence of a recession-proof market. But this recent bump was motivated by seasonal influences only. However, watch for prices to fall back heading into 2024 following spring’s seasonal bounce. Home prices will later slump below 2019 pre-recession levels in 2024, not expected to find a bottom until 2025.

Home sales volume in Riverside will begin to stabilize from the 2023 recession around 2026, at which point ender users will return to drive up sales volume and prices. In the meantime, real estate agents who need to switch their services to make a living in this buyer’s market will turn their focus to the types of buyers willing and able to purchase during a recession – namely, investors and purchasers of distressed properties.

Inventory climbs out of the hole

Chart update 09/14/23

May 2023May 2022Annual change
Riverside County for-sale inventory11,00013,000-15%

Multiple listing service (MLS) inventory has risen from the historic low reached at the end of 2021. After two years of steep decline, for-sale inventory in Riverside averaged a significant 42% above a year earlier at the end of 2022 as buyers quickly lost interested in the spiraling housing market. But by mid-2023, inventory had reversed direction, now 15% below a year earlier in Riverside.

The reason behind the inventory drop? Unlike the pandemic-era demand spike which pushed inventory into the basement, today’s low inventory numbers are most often due to reluctant sellers – not overactive buyers. As evidence, the number of new listings continues to dwindle, alongside home sales volume.

The winter months typically see the lowest inventory of homes for sale, peaking around mid-year.

Looking forward, expect inventory to climb in 2024. The significant interest rate increases of 2022 have slashed buyer purchasing power, making it nigh on impossible for mortgaged homebuyers to compete. Along with high inflation, the signs are pointing to a rapidly approaching downturn in the housing market — of which homebuyers and sellers are well aware. The seller’s market of the past decade has fully tipped into a buyer’s market, with prices now plunging as we head into 2023, as homebuyers increasingly take a wait-and-see approach to buying.

Turnover falls

Chart update 11/08/22

Riverside County homeowner turnover rate8.3%8.7%8.9%

Riverside County renter turnover rate


Without homeowner or renter turnover, homes do not sell. In Riverside, the number of homeowners and renters moving in recent years peaked in 2009 due to the tax stimulus and high level of foreclosures, which temporarily lifted sales volume as tenants became homeowners. In a reversal, turnover has swiftly declined since then as potential end users have chosen more often to remain where they are.

The renter annual turnover rate has fallen dramatically, from above 26% in 2013 to just 11.7% in 2021 (the most recently reported Census year). On the other hand, the homeowner turnover rate fell back just slightly to 8.3% in 2021. Homeowner turnover is still below the level needed for a full recovery in home sales volume.

When slow job growth and wages stagnate, residents lack the confidence (and more importantly, often the financial ability) to move. When significant job losses occur, such as during the 2020 recession, turnover plummets. This dip was further complicated by the eviction and foreclosure moratoriums which encouraged residents to remain in place during the pandemic.

The turnover rate will rise when employment begins to recover consistently and wages improve sufficiently, as these increases boost confidence in the economy and reduce fears of carrying mortgage debt.

After this dip in economic activity, members of Gen Y who have remained employed will be more eager to rush from their apartments to buy and Baby Boomers will begin to retire in larger numbers, generally buying smaller, more convenient replacement homes after they sell. Immigrants will also play a significant role in boosting Riverside County’s suburban resale housing demand. Apartment vacancies will rise as they did in the early 1990s when the boomers took to buying homes.

Homeownership rate bounces back

Chart update 08/09/23

Q1 2023
Q4 2022Q1 2022
Riverside County homeownership70.5%63.9%68.8%

Riverside County’s homeownership rate fell steeply during the last recession but has since achieved the rare status of clawing its way back to Millennium Boom levels. Riverside’s rate of homeownership hovered around 68% from 2000 through the end of the Millennium Boom. As of Q1 2023, the homeownership rate is a record 70.5%, up from nearly 69% a year earlier. This is significantly higher than the state average, which is 55.3% in Q1 2023.

By the end of 2014, the jobs lost in the Great Recession of 2008 were finally recovered, several months following the statewide jobs recovery. But with the intervening eight years of population increase, the ultimate jobs recovery with the strong wage rises needed to support high sales volume and in turn price increases didn’t occur until later in 2019, just in time for the economy to head into its next slump in 20202.

As we continue through the 2023 recession, homeowners behind on their payments are headed toward a forced sale when negative equity piles on with declining home prices. Thus, expect the homeownership rate too gradually fall back below pre-recession levels in 2024-2025, to rise again in the following recovery.

Related article:

The Fed bumps up rates again — the undeclared recession is here

Residential construction mixed

This chart shows the number of new construction starts each month in Riverside.

Chart update 02/14/23

Riverside County single family residential (SFR) starts11,80011,70012,300

Riverside County multi-family starts


Residential construction starts are recovering marginally in the Riverside Metropolitan area. During the current housing cycle, multi-family starts recently peaked in 2015. Since then, multi-family starts have fluctuated each year, declining significantly in 2020, bouncing back gradually in 2020-2021.

Here, the focus on multi-family construction is far less pronounced than in regions closer to the coast, as the lower cost of land keeps SFRs within reach of more households. Meanwhile, single family residential (SFR) starts are rising gradually.

Construction increased dramatically during the Millennium Boom as the population moved from the urban centers of Los Angeles, Orange and San Diego Counties into the bedroom communities of Riverside County. Builders kept pace with buyer demand for new housing. Eventually, their starts overran the 2006-2007 decline in buyer demand. The excess starts resulted almost exclusively from distortions in mortgage and construction financing with personal guarantee arrangements.

When the housing bubble burst in 2006, the sale and thus the construction of SFRs and multi-family housing plummeted. Small builders went bust in droves. Today, the general trend for SFR starts in Riverside County is displaying signs of stability with no signs of reaching 2004 and 2005 numbers in the foreseeable future.

The next peak in SFR construction starts will likely begin around 2025, spurred by legislative efforts to increase California’s housing stock. Even then, SFR construction starts are very unlikely to return to the mortgage-driven numbers seen during the bacchanalia of the Millennium Boom.

Jobs surpass pre-recession peak

Chart update 08/09/23

May 2023May 2022annual change
Riverside County jobs1,675,8001,647,800+1.7%

Before end users can provide sufficient support for the housing market, they need to acquire sustainable income — i.e., jobs with wages exceeding 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 when counting population gain at the end of 2019. But the recovery from the 2020 recession was much swifter, with Riverside one of California’s first major metros to achieve a jobs recovery. As of May 2023, just 69,2000 more individuals are employed in Riverside compared to the December 2019 pre-recession peak. The recovery pace has rapidly dwindled, with the number of jobs held today in Riverside just 1.7% above a year earlier.

However, watch for the chart above to waver in the coming months as the economy heads deeper into 2022’s undeclared recession. It will take another one-to-two years before a more consistent jobs recovery begins to adequately support further home price increases.

Real estate, construction slowly add workers

Chart update 08/09/23

May 2023May 2022annual change
Real estate23,00022,600+1.8%

While many of Riverside’s top employing industries have yet to recover from the 2020 recession, the 2020 recession has thus far been less hard on the real estate industry in Riverside, especially compared to other parts of Southern California.

The number of employed in the construction industry is down 5.9% over the past year in Riverside. At the same time, the number of individuals employed in the real estate industry was up a slight 1.8% from the previous year.

Expect the number of real estate professionals employed to see a decline in the coming years, the result of less stable sales volume and prices in 2023-2025. 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 much more residential construction to keep up with demand from its rising population. State-initiated legislation will likely continue to propel construction even during the lean years ahead.

Per capita income recovers

Chart update 05/09/22

20202019Annual change
Riverside County per capita income$45,800$41,400+10.6%
California per capita income$70,700$65,300+8.3%

Per capita income in Riverside is one of the lowest in the state. Low per capita income holds down rents and thus 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 inflation.

The average employed individual in Riverside earns just $45,800, according to the most recent Census reported year of 2020.  The statewide average income is much higher than Riverside’s. But, the annual income rise in Riverside was a significant 10.6% compared to the state average of 8.3% in 2020. 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 this steep income rise may be attributed to high income-earners moving to the bedroom community of Riverside in search of cheaper housing.

Jobs and the pay received by locals is why homebuyer occupants ultimately determine selling prices. Buyers can only pay as much for a home (or rent) as their savings, income and credit score qualify them to pay — nothing more, no matter the price demanded by sellers. This amount is influenced by interest rates, which provided buyers a boost in 2020-2021. But as interest rates are on the rise for the foreseeable future, expect prices to feel downward pressure.

Expect per capita income to increase concurrently with increases in job numbers and the competition that brings employer demand for more employees.