Riverside, CA and Surrounding Communities
As 2025 ends, it’s a great time to reflect on the year’s key market trends and what they mean for property owners and investors across Inland Southern California. While this year brought national economic uncertainties, fluctuating interest rates, and inflation-driven caution among consumers, the rental and investment housing markets in the Inland Empire—including Greater Riverside, San Bernardino, and surrounding communities—showed remarkable stability.
At Shepherd Realty Group Property Management, we’ve supported our clients through shifting conditions by staying focused on smart strategy, local expertise, and hands-on service. Let’s take a closer look at what defined 2025 and how you can prepare for a promising 2026.
How the Inland Southern California Market Held Strong in 2025
1. Steady Rental Demand Despite Homebuying Hesitation
As mortgage rates rose early in the year, many would-be homebuyers stayed in the rental market longer. This was especially evident across Riverside County, where affordability compared to coastal counties continues to attract working professionals, young families, and remote workers.
Vacancy rates remained low throughout much of the year, particularly in well-maintained single-family homes and newer multifamily units. Properties priced competitively and located near job hubs, transit access, or high-demand school zones experienced strong leasing activity.
2. Owners Benefited from Long-Term Tenancy and Predictable Cash Flow
With renters staying longer and turnover costs minimized, many property owners enjoyed consistent cash flow through 2025. Even with local rent control ordinances in place, owners who kept properties well-maintained and rent levels reasonable were able to implement modest, compliant increases to stay ahead of rising expenses.
The market rewarded proactive maintenance, timely upgrades, and responsive management—something our team emphasized throughout the year to maximize both retention and returns for our clients.
3. Investment Activity Slowed, but Interest in Inland Properties Remained High
While high interest rates discouraged some new investors, the Inland Southern California region remained attractive to cash buyers and 1031 exchange investors seeking stable cap rates and lower acquisition costs than neighboring counties.
Multi-unit properties in areas like Riverside, Moreno Valley, and Jurupa Valley continued to draw interest thanks to the region’s population growth, economic expansion, and diverse housing stock.
Key Stats for Inland Empire Property Owners
Based on local data through Q4 2025:
- Average rent for a 3-bedroom single-family home in Riverside: ~$2,750/month
- Rental vacancy rate across the Inland Empire: under 4%
- Average days on market for well-priced rentals: 12 to 18 days
- Cap rates on investment properties: averaging 5.5% to 6.2% (depending on location and condition)
- Home price growth: modest year-over-year increase of 2% to 4%, with higher resilience in entry-level segments
These indicators show that well-managed rental assets in our region remained strong performers even during a cautious economic year.
What to Expect in 2026: A More Favorable Landscape
Looking ahead, there’s reason for optimism. Real estate economists and regional analysts project gradual easing of mortgage interest rates in mid to late 2026, with inflation showing signs of cooling and consumer confidence expected to rebound.
Here’s what property owners and investors should be watching:
1. Interest Rates May Ease, Encouraging Investment Activity
If rates decrease as projected, we may see more investors re-enter the market in 2026, potentially boosting demand for income-producing properties. This also offers opportunities for current owners to refinance high-interest loans or unlock equity for renovations and acquisitions.
2. Continued Migration Inland Fuels Long-Term Rental Demand
The Inland Empire remains one of the most affordable options in Southern California. As housing costs remain high in Orange, Los Angeles, and San Diego counties, renters and buyers alike are looking eastward for value and space. This regional migration continues to support rental demand, especially in communities like Eastvale, Menifee, and North Fontana.
3. Market Conditions Favor Well-Positioned Owners
Owners who keep their properties competitive—well-maintained, energy-efficient, and priced right—will remain in a strong position. Rising operational costs, including insurance and maintenance, can be offset by strategic planning, preventive care, and smart tenant placement.
Action Steps for Owners Going Into 2026
Now is the time to plan. Whether you own a single-family rental or a portfolio of multifamily units, these steps will help you enter 2026 with confidence:
• Review Your Lease Agreements
Ensure leases are current, compliant with local ordinances, and structured to protect your investment.
• Assess Rent Levels
Compare your current rates to local averages. If your rent is under market, consider a legal increase during renewal to match today’s demand.
• Schedule Preventive Maintenance
HVAC, roofing, plumbing—staying ahead of big-ticket repairs avoids surprise expenses and keeps tenants happy.
• Evaluate Your Management Strategy
If managing your properties has become overwhelming, or if vacancies are lingering, it may be time to work with a local team that specializes in your submarket.
• Prepare for Opportunities
Keep an eye on listings. As conditions improve, well-priced properties may hit the market, and being prepared with financing or equity can help you act fast.
Why Work with a Local Property Management Partner?
In this market, it pays to have local eyes, ears, and hands on your investment. At [Your Property Management Firm Name], we specialize in Inland Southern California markets—from Riverside and Corona to Redlands and Murrieta. We understand the regulations, the rental patterns, and the neighborhoods that make this region tick.
Our services include:
- Full-service leasing and tenant screening
- Rent collection and accounting
- Maintenance coordination and 24/7 support
- Legal compliance and lease enforcement
- Portfolio growth consulting and acquisition analysis
We don’t just manage properties—we help you build long-term wealth.
Final Thoughts: 2025 Was Resilient. 2026 Can Be Rewarding.
While 2025 brought its fair share of uncertainty, the Inland Empire’s strong fundamentals remained intact. Owners who stayed proactive and informed came out ahead, and the forecast for 2026 gives reason to feel encouraged.
If you’re ready to grow your portfolio, improve your property performance, or simply take a break from day-to-day management stress, we’re here to help.
Schedule a Call with our Owner Specialist.
