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Loren Faulkner

Construction Update: Inland Empire
April 28, 2008

The Southern California Counties of Riverside and San Bernardino start roughly one hour drive east of the Pacific Ocean and a 90 minute drive North of San Diego and the Mexican border. Their eastern edges border Nevada and Arizona.

Once there, if you go West again for about a half-hour, from Riverside, depending on traffic, you’ll reach Disneyland, the Anaheim Pond, and Angel’s Baseball stadium—Orange County.

For the past few years, So. Cal. developers have looked north and east to the Inland Empire as the final frontier for cheap land, new housing and commercial developments. The Port of Los Angeles increased overseas shipping container transportation by rail to Inland storage, and road/railway departures to the rest of the U.S. It was a natural for a housing boom. One of the hottest construction spots in America.

But the housing boom has gone bust. The national mortgage problem has caused home foreclosures in Riverside County to jump nearly 350-percent above last year, and San Bernardino County foreclosures rose nearly 400-percent at the same time.

The Press Enterprise reports that Inland home building has fallen some 60-percent since 2007.  In the first quarter of 2006, 5,227 homes were started, but 2008’s first quarter shows only 870 home starts.

All this has parked a lot of earth moving equipment. One sales manager for a large heavy equipment dealer in the area told me sales are down a whopping 88-percent from the same time last year. No one is quite sure when a recovery will start. Some guess mid-2009. It’s only speculation.

Brighter Construction Section

But some construction companies are bidding now on infrastructure work. Bond money—some $42-billion made available through five voter approved bonds in 2006-- is being doled out.  For Inland areas, not a moment too soon as the increased rail traffic, and housing tracts have caused traffic nightmares in cities, freeways, and rural areas. Riverside County got a $500-million slice of Prop 1-B’s pie recently to work on railway crossings and other road projects.  But some are calling it much too little to tackle those problematic areas, and want more.

Ready to Grow Again

At any rate, the Inland Empire is poised to boom again. Studies show that in just seven years, one million more people will have moved to the Inland Empire.  The Press Enterprise compiled these growth figures for the following Inland Empire areas:

San Jacinto Valley/Pass: +56 percent

Southwestern Riverside: +49 percent

High Desert: +35 percent

Coachella Valley: +33 percent

Eastern San Bernardino County: +17 percent

Western San Bernardino County: +15 percent

Northwestern Riverside County: +14 percent

But whether growth will occur this quickly with the current economic variables is the real question.

Posted by Loren Faulkner on April 28, 2008 | Comments (0)