Ontario from the Air

Economic Activity Increasing in the Inland Empire

Posted on December 24, 2012 ยท Posted in News

Since 2009 the Riverside – San Bernardino metropolitan area has added 30,000 jobs and growth continues to pick up in all areas of the economy including residential and commercial real estate. Though the area has yet to reach pre-recession levels of economic activity, strong growth is forecasted throughout 2013 and beyond.

To give some perspective on the area’s recovery relative to the rest of Southern California, the following chart shows jobs added since 2009 when California was in the worst period of the economic downturn:

Jobs Added Since 2009

  • 114,700 Los Angeles County
  • 55,200 Orange County
  • 48,900 San Diego County
  • 30,800 Riverside-San Bernardino Counties

While the area still has a ways to go to reach pre-recession employment levels, forecasts for overall job growth in California look good with economists predicting 2 percent annual growth through 2014 then accelerating to 2.5-3 percent for 2015-2017. Since the state bottomed out, more than 650,000 jobs have been added statewide.

One of the biggest drivers has been the reversal in the real estate sector. Area home prices are expected to increase 6-7 percent this year with an additional 4-5 percent increase in 2014 before slowing to 2-3 percent through 2017. Sales of newly built homes are up 14 percent this year and new home starts are starting to pick up.

Real estate had been hindering the area’s recovery but with forecasted growth and a significant drop in foreclosures it will now be contributing to it.

Vital Signs

  • Unemployment is still higher than normal but down nearly 2 base points year-over-year
  • Taxable sales grew 9.2 percent compared to 2011
  • Tax revenue from restaurants and hotels is up nearly 9 percent year-over-year
  • B2B spending increased 3 percent in Riverside County and nearly 15 percent in San Bernardino County

Great Deals Still Exist for Commercial Space

“Vacancy rates for office and warehouse space remain elevated and the market will remain in the tenant’s favor throughout 2013,” said Jeremy Trotter of Synergy Real Estate Group. “However we are starting to see some areas tighten up and businesses looking for office or warehouse space should start looking for space now in order to get the best possible deal going forward.”

Trotter says that area landlords are still offering great incentives to prospective tenants but that they are slowly becoming less aggressive when offering concessions due to overall market improvements. He recommends using a tenant representation company like Synergy Real Estate Group to get the best possible deal on your next lease.

“The earlier you start the process of finding new space the more money you are going to save over the life of the lease,” said Trotter. “Waiting until the last minute will hinder your company’s ability to take full advantage of available concessions.”