According to a new analysis conducted by University of California Riverside School of Business Center for Economic Forecasting and Development, the demand for single-family homes in the Inland Empire has fueled the strongest building activity in nearly a decade.
The local housing market continues to post price and sales gains in 2017. Single-family home construction in the region hit its highest level in 9 years, at 2,182 units, in the first quarter. This represents the greatest number of units built since the first quarter of 2008 when 2,242 units were constructed, according to the analysis.
"This is a substantially higher pace of activity than we have seen at any time in the recent past and may signify a much needed increase in single-family home construction in the region," said Robert Kleinhenz, executive director of research at the Center for Economic Forecasting and Development.
"Still, it is only a fraction of the building we saw prior to the recession when the number of quarterly units built was in the 9,000 to 11,000 range. Kleinhenz also added that while the recent increase is a very welcome sign, that kind of perspective tells us much more is needed."
Other key findings found in the analysis include: While employment growth has slowed across California over the last several months, it has continued in the Inland Empire with non-farm employment in the region jumping 3 percent from April 2016 to April 2017, compared to 1.4 percent in the state as a whole; a tighter job market has led to rising wages, with the average annual wage in the Inland Empire reaching $43,800 in the third quarter of 2016, up 2.7 percent from one year prior; rising incomes and job counts have paved the way for increases in local spending; taxable sales in the Inland Empire increased 4.2 percent from the fourth quarter of 2015 to the fourth quarter of 2016; Home ownership in the Inland Empire has continued to rebound, reaching over 61 percent in the first quarter of 2017. Local home ownership rates are now near national levels (63.7 percent) and well above California levels (55.1 percent); Rising population, employment, and income have led to increased demand for commercial retail space; the vacancy rate for retail properties in the Inland Empire dropped to 8.1 percent in the first quarter of 2017, its lowest point since before the recession.
As a result of these findings it is expected that an increase shall be seen sooner rather than later as the Inland Empire area continues to grow due to employment found in the cities that are part of the Inland Empire, and the workforce needs places to settle down in or families that could potentially relocate to the area for job opportunities.