By Jordan Brooks, Director of Market Analytics for ALN Apartment Data

Recent multifamily performance in the Inland Empire tells two different stories. A favorable shift in the supply-demand balance lifted average occupancy above 94%, but the recovery remains uneven and has yet to produce meaningful rent growth. The region therefore does not fit neatly into familiar national patterns. Unlike many high-supply Mountain West and Sunbelt markets, it has largely repaired its occupancy deficit. Yet unlike many Midwest markets, tighter conditions have not translated into stronger pricing.

[All figures in this article refer to conventional properties of at least 50 units. Rent data reflects rent for new leases. The Inland Empire is defined as San Bernardino and Riverside counties.]

Supply-Demand Balance Improves, But Demand Is Concentrated

As in many markets around the country, the most important shift over the last year was a decline in new supply alongside stronger net absorption. New supply has not remained consistently elevated in recent years, but the delivery of more than 2,800 units from August 2024 through July 2025 produced a short-lived surge. With deliveries retreating and absorption strengthening, net absorption exceeded new supply by nearly 2,000 units during the last 12-month period.

The improved balance gave occupancy much-needed room to recover. A 315-basis-point gain over the last year lifted market average occupancy to just above 94% at the end of July. Occupancy had not reached that level since early 2023, and the current average sits comfortably above the national rate.

The headline improvement, however, overstates the breadth of demand. Leasing gains have been concentrated in newer properties and the upper price tiers. Seasoned stabilized properties, those that have been stabilized for at least two years, lost nearly 500 leased units over the last 12 months. That reversed positive net absorption in each of the two preceding 12-month periods ending in July. The decline extended across all four price classes among seasoned stabilized properties. Class A and Class D were hit hardest, with net losses of about 150 and 180 units, respectively.

Newer Class A product accounted for much of the market’s positive absorption. Net absorption for Class A as a whole of about 1,500 units nearly doubled the previous 12-month total and led all price tiers. Class B recorded a net gain of nearly 800 leased units, up moderately from approximately 500 in the prior period. But, unlike in many areas of the country, the workforce housing segments did not lose leased units overall. Class C net absorption totaled roughly 400 units over the last year, while Class D was essentially flat. The Class C result marked a slight year-over-year improvement; Class D lost momentum from the previous period.

Occupancy Recovers, But Pricing Power Remains Limited

The market’s improved balance and higher occupancy would normally provide a firmer foundation for rent growth. So far, these factors have not. Average effective rent growth remained weak despite the considerable improvement in supply and demand – a disconnect also visible in many markets nationwide.

Average effective rent increased by just 0.3% over the last year, down sharply from 3.9% in the previous period. The latest gain was half the national rate, and the Inland Empire’s year-over-year deceleration was steeper than the national slowdown.

Concession availability offered one encouraging sign. The share of conventional properties offering a discount declined by 5% over the last year, ending four consecutive 12-month periods of increasing availability. Just 14% of properties offered a concession to new residents at the end of July, well below the 24% national rate. The concession data nevertheless tells a more nuanced story. Among properties still offering discounts, the average value rose about 12% to just under three weeks off an annual lease. In other words, fewer properties are using concessions, but those that still need them are leaning more heavily on the strategy. Even after the increase, the Inland Empire’s average concession value remained below the national average of roughly 4.3 weeks.

The disconnect between occupancy and rent growth distinguishes the Inland Empire from broader regional and national patterns in two ways. First, many of the markets struggling to generate rent growth are high-supply Mountain West and Sunbelt markets are still climbing out of a supply-created occupancy deficit. The Inland Empire, by contrast, has returned to an occupancy level that would generally support rent growth.

The other difference is that the year-over-year slowdown in rent growth has extended across all four price tiers rather than concentrating primarily in the workforce housing segments. Class C has faced the most obvious pricing pressure, but Class A and Class B also recorded weak gains and considerable deceleration from the previous period. Together, these differences point to a broad-based constraint on pricing power rather than a problem isolated to excess supply or lower-tier distress.

A Stronger Starting Point Faces a New Supply Test

Inland Empire multifamily performance has improved meaningfully, but the recovery remains incomplete. Net absorption outpaced new supply by a wide margin over the last year, producing a sharp rebound in occupancy. Maintaining that balance could become more difficult. Nearly 6,000 units are currently under construction, and deliveries are expected to increase over the next couple of years.

The composition of recent demand adds another layer of risk. Absorption gains have been concentrated on newer, higher-priced properties, while seasoned stabilized assets have lost leased units and rent growth has remained weak across the market. The next wave of deliveries will therefore test whether leasing momentum is deep enough to spread beyond the properties currently carrying out the recovery.

At 94% occupancy, the Inland Empire enters that test from a much stronger position than it held a year ago. A durable recovery will require broader absorption among seasoned properties and renewed rent growth across price classes. Until those gains emerge, the market’s recovery is real, but still incomplete.

Jordan Brooks is the Director of Market Analytics for ALN Apartment Data. ALN Apartment Data delivers market analytics, trends, and tools to empower multifamily professionals with actionable insights. For more information, go to https://alndata.com/.