Southern California

Inland Empire New Home Market: On Watch for Upgrade from “Warm” to “Hot”

February 17, 2017

The Inland Empire new home market is showing signs of rapid improvement with rising new home sales volume driven by lower prices than Coastal markets, rising job growth, an increase in the FHA loan limit and low levels of resale inventory. If current trends continue, look for an upgrading of our market hotness ranking from Warm to Hot.

  • New home sales in the Inland Empire (Riverside & San Bernardino Counties) were up a remarkable 40% in January 2017 on a project-by-project basis compared to the same month a year ago.
  • Builders averaged 3.5 sales per project in January 2017 vs. 2.5 sales per project a year ago.
  • The YTD sales rate is the fastest since 2013.
  • The “drive to qualify” markets are coming back. Some of the fastest sales rates in January were in areas like Beaumont and Moreno Valley, where the average sales rate was over 5 homes per project.
  • Although our monthly survey of builders in the Inland Empire indicated that 80% held prices flat in January, history indicates that if builders maintain the current sales pace, prices should rise.
  • At least one challenge to maintaining rising sales is the impact that higher interest rates and rising prices have on housing affordability. Affordability at the end of 2016 was at the lowest level since 2009, but still relatively good compared to the mid-2000s peak. So far, declining affordability has not negatively affected sales.

Building Market Intelligence™

Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.

About The Author

Contact Us

If you have any questions about our services or if you would like to speak to one of our experts about we can help your business, please contact Client Relations at

Products and Services Mentioned

green check icon

Research Membership

Our research services enable our clients to gauge housing market conditions and better align their business and strategic investments in the housing industry. We provide a thoughtful and unique holistic approach of both quantitative and qualitative analysis to help clients make informed housing investment decisions.
green check icon

Metro and Regional Housing Package

An overview of major housing and economic trends, as well as forecasts across 100 MSAs nationwide. The information in this subscription package provides a complete picture of housing supply, demand, and affordability through local insight, proprietary surveys, and extensive data analysis.
green check icon


Our experienced team of consultants helps clients make sound housing investment decisions. We thrive on their success and work with many clients over multiple years and numerous projects.

Latest Insights

Building Success: Doug Bauer and the Growth of Tri Pointe Homes
Dear Consultant: How will the declining birth rate impact the move-up housing segment?
Golden State Resilience: Four Considerations for California’s Housing Market