The population of Red Valley City is diverse. Twenty-seven percent of the population is under 18 years of age, and the remainder is thirty-five to sixty-four years of age. Forty-nine percent of the households are made up of married couples. Another fifteen percent are comprised of single individuals. Ten percent of the population is aged 65 and older. The average household size in Red Valley City is 2.82 people.
The city's diversity was reflected in the racial makeup of its residents. By the 1920s, black families were mainly located in the Central Area. An African American hotel owner had bought land in the Madison Valley in the early 1890s. As a result, new tools of segregation were employed to set firm boundaries. Racial restrictive covenants prohibited Jews, Asians, and Blacks from buying property in certain areas.