I found that the market continues to weaken, especially in San Bernardino County. Both county’s “summer seasons”, which are supposed to be filled with faster-moving inventory and higher prices, were lackluster. There is regional variation: parts of Riverside county (Menifee and the City of Riverside) are doing better than others (many deeper Coachella Valley ZIPs); same with San Bernardino (better: High Desert; worse: most of the Western part of the County, especially Rancho and Upland). But the overall trend is still weakening.

Median listing prices in both counties have barely changed since early 2025, but there has been a slight decline in San Bernardino which is not apparent in the Riverside statistics. Riverside County also has higher prices in general, which pushes their line up. See the chart below.

The indicator “median days on market” helps track how quickly houses are selling. There is a strong cyclical component to this: you’ll see that the graph goes up and down in a predictable way. In cases like these, I am more interested in the year-to-year changes. For example, you can see that summer 2025 the median days on market were higher than 2024, indicating a slowdown, and summer 2026 was not much better.

I created a Tableau dashboard with additional visualizations and detail. You can see ZIP-by-ZIP level data on median days on market and changes in the listing price, which I’ve talked about here. You can also find ZIP-level data on active listings in a heat map. See it here.

You can pin some of this on transportation costs (i.e., gasoline, new and used cars), which have been driven up by the geopolitical events in recent months. See the chart below.

But that doesn’t explain all of the accelerating inflation. Grocery prices - what the BLS refers to as “food at home” - were also up compared to May.

As I’ve mentioned before, the one bright spot in these inflation data is decelerating food away from home - or restaurant - inflation. Prices in this expenditure group are not falling, but they’re also not at the levels we saw back in 2020-2021, or even more recently in 2023-2024.

One thing we are all keenly aware of these days is the cost of living. Whether it’s groceries, gas, rent, or eating at a restaurant, prices can really sting. Inflation has accelerated again, as I noted in a recent post, bringing this issue into greater focus.

Economists aren’t always the most popular people to talk with about the cost of living because they also look at the earnings side of the equation. They note that the numbers usually balance themselves out: yes, things cost more, but workers generally make more each year than they did the previous year - even more, percentage-wise, than the increase in cost of living.

The problem is that the story is more nuanced than this. Salaried employees have seen significant gains in income, but workers on an hourly wage have seen smaller gains because of the fluctuations in hours. Combining the two, growth in income has been more muted; and all the while, prices keep marching forward.

Wages, hours, and weekly income

Here are wages:

The chart shows mostly robust growth, after a slight dip in late-2022 and mid-2024. Workers are clearly making more per hour today than they did 1 or 2 years ago.

Hours were increasing 2019-2021, but have trended downward since then, especially in the last 1-2 years:

You can even combine these two series to estimate weekly income: take the wages data and multiply it by the hours data. That’s shown below:

Although there has still been progress in worker income, if you home in on the last 1.5 years or so, there has been very little movement in this series, after a jump in mid-2024.

Circling back: inflation and weekly income

Inflation certainly hasn’t slowed down, and may be accelerating again. At the same time, weekly income has barely changed. This paints a much more dire outlook for wage workers than typical economists might otherwise suggest.

The data show we are in about the same market we had in 2024 and 2025, which is worse than 2022-2023 (which was, in turn, much worse than 2020-2021).

But first, prices:

Prices have barely moved at all (consistent with the CAR report for statewide). There has been a modest upward trend of about 2-3% per year since 2022 in both markets.

On sales (indexed, so the totals are not shown), June 2026 compared to previous years in the same month shows a slight improvement in both markets since 2024:

Taken as a whole, the April-June “season” was slightly better in 2026 than 2024-2025 in San Bernardino (with virtually no change in Riverside), and it was still down compared to 2022-2023:

In related data, homes are selling faster than this time last year.

Trends in the unemployment rate can tell a more robust story, but even here, I’m likely to merge that information to other pieces of data.

Today is a case in point: taken over the last 1-2 years, unemployment rates appear stable, if up slightly until the start of 2026. See the chart below.

UI Claims as an alternative indicator

As I’ve mentioned before, you can glean information on a different side of the labor market by looking at unemployment insurance claims data. These numbers come from California’s EDD and are based on administrative records of people who are applying for UI due to a layoff.

These data certainly are not perfect - layoffs don’t tell us about non-participation in the labor market or other challenges workers might be facing - but the fact that these are administrative data (the BLS unemployment rate stats are based on survey samples) and are broken down according to a variety of “cross tabs” gives you a lot of different ways of looking at the same underlying problem of layoffs.

For example, the table below breaks the UI claims data for San Bernardino County down by industry, July 2025 compared to July 2026. (Contact me if you are curious about related numbers for Riverside County).

UI claims are up modestly in administrative support, educational services, and health care and social assistance. Given that the latter two industries have driven much of the job growth of the past few years, these numbers are a source of concern.

UI claims are increased notably among bachelor’s and even master’s/PhD, more than HS or less than HS degree holders. This change may highlight how AI is affecting the market for entry-level and skilled white collar work.

Another worrying trend is that the greatest increases in UI claims by age have been in the slightly younger prime-age brackets of 25-34 and 35-44 - very likely correlated with the educational data that I just wrote about.

The silver lining is that UI claims overall have stayed mostly flat over the last few years. The lack of a clear upward trend here suggests that the composition of layoffs has changed more than the aggregate total amount of them.

Residential real estate in the I.E. continues to show signs of weakness, with just a few bright spots, most of which are in Riverside County. (Data from Realtor.com; feel free to contact me with specific requests!)

We can look at this across a short-term 1-year time window and a longer 2-year time window, but both tell similar stories. Among bigger ZIPs (by active listing count, over 60 in May 2026), the median price change year-over-year is -2.1%. The median decreases to -2.3% if we reduce our active listing count threshold to pick up smaller markets (greater than 40). This number captures some major drops in areas that experienced a lot of growth during the pandemic such as Big Bear and Palm Springs.

Taking a longer view: where have markets declined most over a 2-year span?

In terms of 2-year median listing price growth, there are some markets that have come out in positive territory. Three of the top 6 growth ZIP codes are in Menifee (92587 is 15.5%; 92586 is 2.7%; 92584 is 2.3%) and 8 of the top 10 are in Riverside County. To eschew outliers, I focused on communities that had at least 100 active listings during the time window of the analysis. Read below for what happens when I open that up a bit, and see the table below for the data.

Other parts of Riverside County that are doing well are Indian Wells and La Quinta - higher priced communities deeper in the Coachella Valley. Up closer to Palm Springs and Palm Desert, we’re actually seeing some of the most declines (not shown here - contact me if you’re interested in the full data).

In terms of 2-year median price growth and among ZIPs with a lot of active inventory, the only top-performing ZIPs in San Bernardino are in the High Desert - Hesperia (92345) and Victorville (92392).

When we relax our constraint on the top ZIPs by inventory down from 100 to 60, we see some more bright spots in San Bernardino: Rancho Cucamonga (91739; +15.0%), Chino (91710; 7.5%), and Redlands (92373; 5.3%). But overall, the tilt remains toward Riverside for more activity and higher growth.

What this means for economic development

Capital is always thinking about where the growing areas are, and right now, that appears mostly in Southern Riverside County and parts of the Coachella Valley. In San Bernardino County, many markets are moving “laterally” - not necessarily declining, but without any major momentum. The exception to this is the High Desert. These are the most promising economic development areas for the region for now.

Inflation data for the Inland Empire came in this morning. The “all items” (average across all expenditure categories) rate was 3.4% year-over-year, up from 3.1% in March. Thus, the cost of living continues to increase in the I.E. See the chart below, which suggests another worrying upward trend in the overall rate, after two years of trending downward.

These are the kind of data giving policymakers headaches about what to do with interest rates!

Of course, the big increase was in the “Transportation” expenditure category, which includes gasoline and automotives. That expenditure category increased 7.6% year-over-year.

The 7.6% Transportation inflation rate explains the higher inflation rate in the economy overall.

There is a silver lining to this month’s headline statistics. First, restaurant inflation has declined significantly (see chart below). Second, “shelter” (basically, housing costs) inflation has stabilized.

Other things I’m tracking (but not posting here - message me if interested) include durable/non-durable goods (for tariff impact) and groceries (pass-through from the energy price spikes).

What might surprise you is the composition of job growth. Over the same period, the health care and social assistance sector gained 67.7 thousand jobs on net, meaning it covered losses in other sectors and helped pull the rest of the labor market into positive territory.

Job losses were felt across most other industries, including some of the region’s “workhorses” such as logistics. Using BLS (SAE) data, I estimate that in the “transportation and warehousing” subsector, job loss of 1.5 thousand over the same period.

The difference makes me wonder whether we are seeing another sectoral shift in the region’s economy and how we might capitalize on that. In the 2010s, all the discussion was around the booming logistics sector. You can see it in the tail end of the 2010s in the graph above. But in the 2020s, it seems the economy has pivoted toward to health and, importantly, social assistance (the latter of which includes various family and social services - not just health). That was one of several of the findings from my county-specific 5-year job projections (contact me if you’re interested in seeing those). Now, the faster growth is in that sector.

What These Differences Mean for Riverside vs. San Bernardino County

You might argue that these differences are part of the broader divergence between San Bernardino and Riverside County. The former remains more focused on logistics than the latter. But health care jobs are increasing in San Bernardino County, too (5.2%). They just aren’t increasing as much as they are in Riverside (6.9%).

If anything, these statistics suggest that the two counties will further diverge for the foreseeable future. It’s not that there is no future for logistics growth, but it will be muted and concentrated in San Bernardino County, whereas the region’s stronger job engine shifts to health care.

What We Can Do

The region could build on this momentum in health jobs by encouraging innovation in this sector; important partnerships likely exist between health and other (private) sectors, such as manufacturing, education, among others. We should also make sure we are investing in our community health infrastructure.

To play devil’s advocate: some analysts have remarked that a lot of the health and social assistance sector relies on federal funding, such as Medicare, to stay afloat. So, federal regulations could disrupt the labor market. But the region’s demographics mainly suggest that in the next 5-10 years, demand for many health services will remain robust. Especially in an age of AI, we will always need social workers, mental health professionals, and other frontline health service workers.

These days, one of the biggest puzzles economists are working on is figuring out which of the above diagnoses is most true. The solution to the puzzle is extremely important for understanding whether, or when, the Federal Reserve should cut interest rates.

Labor force participation rates are clearly down, meaning a smaller percentage of the population is either employed or actively looking for work. See the chart below.

Cue a point in support of the “weak” diagnosis.

That sounds like a clear answer that the the market is weak. But flows into employment - from either unemployment or not in the labor force - are stable and slightly increasing, especially among unemployed workers. This means people are not having an especially difficult time finding work, because the number of people moving into a job from being unemployed, or not in the labor force, is stable. See the chart below.

Cue a point in support of the “stable” diagnosis.

Finally, the number of people searching for work who are dropping out of the labor force is increasing. There has been a “swing” in this indicator, where it declined significantly between 2021 and 2023, before heading back up since. In other words, there is a substantial group of people who are giving up looking for work from one month to the next. See the chart below.

Cue another point in support of the “weak” diagnosis.

In sum, there is more evidence for a “weak” diagnosis than either a “stable or “healthy” diagnosis. The Fed should more strongly consider cutting rates. But since inflation remains elevated, it will be harder to justify that policy stance for the next few months, at the very least. But from a labor market perspective, the economy is not in a good shape.

The only areas where I see some upward movement are in cities just on the Western edge of both San Bernardino and Riverside County. Other than that, they are either flat or falling. First, the two counties overall:

Median rents are historically a bit higher in Riverside County, with current readings around $1,900 ($1,800 in San Bernardino), but the counties follow similar trends. They have both declined since 2022 and are flat for the past few years.

Zooming in, we see that higher-priced cities are moderating or slightly increasing, while lower-priced cities are seeing rents falling. That picture is most clearly seen in Riverside:

As you can see, Corona (right on the edge of the county) median rents are flat or even slightly up over the year (still down from 2022), whereas other markets have been decreasing for over 2 years.

It’s almost the same pattern in San Bernardino: Chino Hills, which is right on the western edge of the county, is highest-price and is trending slightly upward; the rest of the inland cities I looked at are either down slightly or flat.

The declining rents speak to the broader issues I’ve identified with weakening market demand for housing. It’s just too expensive out there, and incomes are not growing like they were in 2021 and 2022. So, both on the supply and demand side, the market harbors weakness.

People have thought that the Inland Empire is immune to these trends. We have cheaper housing costs, which is a major reason people move. But it’s not the only reason. The economic theory of migration says people migrate for costs and benefits. Even if costs aren’t rising, if the benefits aren’t there, people will try elsewhere.

Let me be very clear about that: the Inland Empire might have low housing costs, but if economic opportunities (i.e., job opportunities) aren’t there, it won’t make up the difference. People will try other states instead.

It looks like this is already happening in San Bernardino County, and may be starting to happen in Riverside County.

In San Bernardino, outflows of people have exceeded inflows for three years of data in a row. The chart shows that while both outflows and inflows are declining, inflows are falling faster, indicating less interest in the region and causing net outmigration.

In Riverside County, inflows have consistently exceeded outflows. So, Riverside has net in-migration. But Riverside’s (positive) net migration rate has declined recently. The gap between outflows and inflows is narrowing. The chart suggests this is happening because outflows are not decreasing, while the number of inflows is decreasing, slightly, indicating less interest there, too.

One statistic that jumped out to me is the income of migrants. I calculated the average AGI (this is IRS data, after all) of in-migrants and compared to out-migrants in both areas, by household. In San Bernardino, the income of households moving out is higher than the income of households moving in. In Riverside, the reverse is true: higher income of households moving in, than out.

Multiplied over so many migrating households, you begin to see who is gaining and losing money. It matters a lot for the future of the region on many fronts. These may not be big numbers percentage-wise, but they add up, and the trends are not in the right direction.

1. Where is the County getting younger?

The under-18 population is shrinking in many parts of Riverside County, but there are some parts where it’s growing. I found increases in the following communities, among the top 11 cities in the County:

Perris (1.4%), Menifee (8.0%), Indio (39.4%)

All the other major cities are seeing declines in the under-18 group.

The change in Perris is minimal and may even be within the margin of error. Menifee is in Southern Riverside county and the reason for growth in the under-18 population there might be simply that it has experienced substantial population growth among all age categories. As they say, “a rising tide lifts all boats”. At the same time, Menifee has also leaned into its sizable stock of Single Family Detached housing through development and recruitment strategies. An astounding 84.4% of Menifee’s housing stock is single-family detached, highest among major cities in Riverside County.

Separately, the gains in Indio have to do with low housing costs and a boom in the Coachella Valley among younger workers and households in general. As younger workers flock to more affordable options, this also increases the “aging rate” of other communities. We’re seeing similar dynamics in San Bernardino as well, in the High Desert.

So, a combination of housing stock and regional appeal is helping keep these communities relatively young.

2. How to increase homeownership rates? Change your housing stock composition

Related to the above, one of the most solid relationships I found in my research is between single family detached housing stock and homeownership rates. Menifee is not an exception: in general among the 2-County region, for every percentage point increase in the share of a city’s housing stock that is single-family detached, a community can expect a 0.5 percentage point increase in its homeownership rate. See the scatterplot below.

3. What drives income growth? Workforce composition and educational attainment

Riverside County’s median income growth is one of the major victories over the last few years. It’s also one way that it differs from San Bernardino, which has seen out-migration and a corresponding decline in income.

All cities in Riverside County saw median income growth, but some much more than others. The highest 5-year median income growth was in Hemet, where median income growth increased 57.3% between 2019 and 2024. This was followed by Moreno Valley (41.7%) and Menifee (34.5%). See the table below for the complete list of major cities in Riverside.

What drives these changes? In the two-county region, we found the strongest correlation is with an increase in finance, insurance, and real estate workforce shares, which is a high-income industry. The second highest correlation is with an increase in the percentage of the workforce with a bachelor’s degree. So, educational attainment matters as well. These findings are based on a statistical analysis of major Inland Empire cities.

Among similar cities, changes in finance, insurance, and real estate workforce shares have a bigger impact than educational attainment.

4. Do commute rates matter? How can I use them?

The Inland Empire is a high-commute zone. Parts of the County have average 1-way commute rates over 50-minutes! If you have a relatively high percentage of your residents who commute outside for work, it’s a double edged sword: those residents are likely bringing back home more income than your residents who work locally. On the other hand, those residents would probably like to work closer to home, as long as they don’t sacrifice pay. Thus, a high commute rate can be a sign that your residents are “hungry” for local jobs and services-based industries. It’s an excellent opportunity to push for all the great ways in which your residents would like to engage more locally.

Higher commutes are also an equity issue. Women are more likely to sacrifice employment if the commute is too long. The reason is obvious: they are more likely to be the primary responsible caregiver. Having a good supply of local, accessible jobs can therefore boost employment and economic engagement specifically among the female workforce.

My analysis speaks to the people working here, and by association, the kinds of jobs they are in, and how they are paid. If you’re interested, contact me and I’ll send you a copy. I am finishing it up now and it should be ready to share in the next week or so.

One of the interesting things I can do, statistically, is create three different groups and look at outcomes between them: people work and live in the IE, people work in the IE but live outside the IE, and finally people who work outside the IE but live in the IE.

One way that this makes a difference is with homeownership rates. I found that 69.4% of people who live in the IE but work outside of the IE own their own homes. On the contrary, non-IE residents who work in the IE have a homeownership rate of 58.6%. See the table below.

There is also a difference in race and ethnicity. IE residents are slightly more likely to be White than IE workers, and are slightly *less* likely to be Latinx. Again, these differences are even starker when we consider IE residents who don’t work in the IE vs. IE workers who don’t live here.

Another way this makes a difference is when you look at the kinds of jobs people have. Among people who live in the IE, less people are employed in production, transportation, and materials moving occupations than people who work here. They are also slightly less likely to work in trade and transportation/warehousing industries than people who work here.

The Inland Empire needs to become a region which attracts higher-income workers. This will help it become more attractive for younger workers. In a time when many are considering leaving the state (or have already done so), we need to do all we can to attract talent. This report raises awareness about this important fact.

• One could argue that healthcare and social assistance job growth is artificially high these days, driven by low growth in the pandemic years 2020-2022 which will make any growth since then look much larger than longer-term trends would suggest

• However, this claim does not survive closer scrutiny by healthcare subsector: some areas have seen a recent “surge” (like doctors’ offices), but in other subsectors job growth is consistent across a long time period, 2015-2025, and covers a range of areas, including outpatient care, other non-primary health providers, and individual and family services

Health and social assistance is a big industry, both nationally and here in the Inland Empire. In Riverside County alone, job growth in this sector was 6.9% per year over the last 10 years, 2015-2025, and 20% of all jobs in Riverside County were in that sector in 2025. Wage growth was more modest, at 2.8% per year (barely keeping up with the area’s inflation rate), but certain subsectors are doing better (see below). Doctors, hospitals, outpatient care, other health practitioners, and hospitals are all driving this, but so are youth and social services, behavioral health, and other elements of this super-large industry.

There has been some discussion lately about just how much this industry is driving the current economy. It seems disproportionate. Month after month, most of the job growth in the IE is coming precisely from this sector. Can it continue?

An aging population and the necessity for care-related work (what economists would call “inelastic demand”) should continue to drive jobs, but analysts also suggest that dependence on public funding (mostly Medicaid), and an artificial post-pandemic “catch-up” in hiring is playing a key role in the recent job growth “surge”, which would suggest a weaker footing for further growth.

In this post I’m concerned especially with that second factor - the extent to which the growth we’re seeing today is a product of a 2022-2025 post-pandemic wave. It is certainly true that, nationally, the pandemic caused some shedding of healthcare jobs, and that what we’ve seen since 2022 might be more of a rebuilding. But that claim strongly depends on the subsector you look at.

In the Inland Empire, the strongest evidence we’ve seen for this kind of “pick-up” in job demand is in some of the most recognizable healthcare subsectors: physicians offices, nursing care, and retirement facilities have all seen faster growth in 2022-2025 than in 2015-2019. See the table below.

In other core areas, though, like Individual and Family Services and Other Health Practitioners (chiropracters, optometry, speech therapy, etc.) demand has been stable from 2015-2019 to 2022-2025. These are also some of the highest-employing subsectors: Individual and Family Services composes about 38% of all jobs in NAICS 62 (health and social assistance), and Other Health Practitioners about 5%.

In short, while some of the growth in healthcare jobs might be attributed to a post-pandemic “correction”, a lot of the other job growth has been more consistent across the 10-year period between 2015 and 2025.

The clearest evidence of this is at the IE level: the slowdown in inventory-weighted median listing price growth has pushed this indicator into negative territory, and the lowest-so-far growth rate of -2.3% was recorded just last month. See the chart above.

There is other evidence. The inequality in listing price growth across markets I wrote about before continues to show the greatest declines in the <500K market, and the second-largest declines in the middle (500K-700k) market. The upper-end of the market is still in positive territory, but things have worsened markedly in just the last three months.

You can also see these dynamics across specific ZIPs in San Bernardino and Riverside. Colton (92324) has seen some of the sharpest declines, but even higher priced markets like Redlands (92373) are going through a correction. In the City of Riverside (92507) as well as further south in Murrieta, prices have declined for several months as well. Contact me if you’re interested in a specific ZIP or city.

Inventory data reflect the same story - houses are taking longer to sell than they were a year ago. Here are a few of the areas that have seen the biggest impact:

When entire neighborhoods burn, you expect housing markets to freeze.

That didn’t happen in Los Angeles. It’s been a little over a year since the Palisades and Eaton fires broke out in LA. Both were devastating losses of life and property. We are still recovering from the aftermath, and the real estate market is no exception.

Using historical ZIP code-level data from Realtor.com, I looked at some of the most heavily affected ZIP codes from the Palisades fires and compared them to nearby areas that were less affected. I found some surprising things.

First, the not-so-surprising: the steepest declines in median listing prices were in the core affected areas such as Pacific Palisades (ZIP 90272, a high-priced area) and Topanga (90290, mid-range - for that area), among others. These areas suffered significant loss of life and structural destruction.

Something more surprising: areas that were very close to the main burn sites have seen a small increase in median listing prices, despite a general secular downturn throughout LA (and SoCal more broadly). My key data point here is Woodland Hills (South), ZIP 91364. It was adjacent to evacuation warning zones and served as a shelter location for victims, but compared to January 2025, median listing prices there in January 2026 were slightly up. However, Santa Monica (north of Montana), ZIP 90402, also falls in this category.

Why the difference? In Pacific Palisades and Topanga, damage and uncertainty likely increased the number of distressed or land-value listings, while damaged homes were priced at steep discounts and potential buyers were likely facing significant challenges with obtaining insurance. That pulls down prices there.

In contrast, Woodland Hills is more suburban and had less insurance uncertainty; the decline in demand in Pacific Palisades and Topanga may have even caused some of the price increases we saw in Woodland Hills.

This seems even more plausible when we look at comparison areas: along with the pre-trends in the core impacted areas, it suggests prices would have declined already were it not for the fires. See the plots for Santa Monica (mid-city), Westwood, and West LA below.

Thus, Woodland Hills really is an outlier, albeit one we can explain.

It’s interesting to see a market, so in the thick of things, where home prices have gone up year-over-year. It certainly points to the strength of demand for real estate in LA, along with the interplay of insurance markets and spatial equilibrium causing a reshuffling of demand.