by Bill McBride on 6/21/2015 12:36:00 PM
Sunday, June 21, 2015
One of the areas I focused on during the housing bubble and subsequent bust was California's Inland Empire.
Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire. I wrote:
As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, the larger the negative impact on the local economy will be.And sure enough, the economies of housing dependent areas like the Inland Empire were devastated during the housing bust. The good news is the Inland Empire has recovered significantly, and this time without an over reliance on construction.
So I think some pundits have it backwards: Instead of a strong local economy keeping housing afloat, I think the bursting housing bubble will significantly impact housing dependent local economies.
Click on graph for larger image.
This graph shows the unemployment rate for the Inland Empire (using MSA: Riverside, San Bernardino, Ontario), and also the number of construction jobs as a percent of total employment.
The unemployment rate is falling, but still slightly elevated at 6.2% (down from 14.4% in 2010). And construction employment is increasing, but up only slightly from the lows (as a percent of total employment).
Overall the situation in the Inland Empire is much better today.
Posted by Bill McBride on 6/21/2015 12:36:00 PM