Construction spending will continue to fall in Inland Empire, Chapman forecast says
The Inland Empire, which includes San Bernardino and Riverside counties, was one of the epicenters of the housing boom. Now, vacant McMansions still plague some towns and home prices in some areas have dropped 50%. Construction employment in the counties has also dropped by more than half since the boom days.
That picture won't improve anytime soon, according to a forecast out Wednesday from Chapman University.
Construction spending will decline at an average annual rate of 4.6% in 2011, Chapman forecasts, after shrinking more than 46 % in the second quarter of 2009. The number of homes for sale will remain high as well, the forecast says.
"There is a large existing shadow inventory held by financial institutions, and there are still a number of homes that are moving through different phases of the foreclosure process," the report says.
That shadow inventory will lift prices more slowly than they grew in 2010. Chapman forecasts single-family home prices to grow 4.2% in 2011, after rising 10% in 2011.
Payroll employment will remain weak, too. Chapman says it will grow just 1% in 2011, meaning the region will add 12,000 jobs. The region lost 174,700 jobs since the official beginning of the recession, in December 2007.
-- Alana Semuels
Photo: A housing development in Hemet. Credit: Alana Semuels / Los Angeles Times