Possible Resurgence in California’s Inland Empire Interests Agents

Known as “the 909,” or “the IE” by Southern Californians, terms sometimes intended as a slight, the sprawling desert area east of Los Angeles was a boomtown for commercial and residential development before the recession hit.

But when the economy sank, foreclosure rates skyrocketed and commercial development nearly ground to a halt, and the IE or Inland Empire became one of the worse suffering areas in the region for a number of years. Several projects still sit partially developed, and many existing buildings remain vacant.

At one point in 2012, the Inland Empire metropolitan area – Riverside, San Bernardino, Ontario – made the list of top five cities with the most homes in foreclosure in the nation. It was just a year ago that there were one-in-213 homes in the area in some stage of foreclosure, according to RealtyTrac.

Now, some economists and insurance agents feel the area’s economy is getting back on track.

Edgewood Partners Insurance Center announced in early April it’s planting a flag in the area. Following the acquisition of Ontario’s Homeplace Insurance Brokers Inc. in January, EPIC formally launched its Inland Empire division under Managing Principal Dan Ryan. It makes EPIC’s ninth office in California.

Among the drivers of EPIC’s push into the Inland Empire is solid construction numbers.

“What we are seeing is it’s starting to pick up, both in construction, which we do quite a bit of, and it’s starting to improve in the wholesale distribution and light manufacturing areas,” Ryan said.

A purchasing managers index survey in April by the Institute of Applied Research housed at Cal State University San Bernardino backs that optimism.

The PMI was 59.7 for March, up from February’s 53.7, according to the report. March’s Production Index of 63.9 registered a sharp increase from the previous month’s 55 index number, while the New Orders Index rose to 63.9 from 56.7. The Employment Index remained above 50 for the second month, increasing from to 59.7 from 53.3 the prior month, the report shows.

An economic forecast in February from the Los Angeles Economic Development Corp. shows the Inland Empire and Orange County leading Southern California in labor market gains. The Inland Empire is set to see more rapid job growth in the next year on top of the roughly 20,000 jobs added to the area’s economy over the last two years, according to the report, which forecasts construction job growth of another 6 percent in the area through 2013.

Despite the good news there are those who believe the upticks in business activity are far from what can be considered a broad-based recovery.

Anyone watching events unfold in one of the Inland Empire’s largest cities, San Bernardino, can argue things aren’t great everywhere in region. San Bernardino grabbed headlines lately because it filed for bankruptcy and declared a fiscal emergency. The city’s residents face the loss of municipal services.

Dennis Ferguson, vice president, Kessler Alair Insurance Services, which has offices in Upland and Rancho Cucamonga, offered some constrained optimism on business recovery in the Inland Empire.

“There is a lot of talk of the positive indicators out this direction, and we do have some clients who have probably had some growth year-over-year,” he said.

However, his assessment of any Inland Empire recovery is that “it’s far from broad-based,” and many of the companies his firm deals with continue to struggle, he said.

“It’s still very, very challenging,” he added.

An area south of the Ontario Airport was eyed for years for development. With the recession developers cooled on such prospects.

“There’s a lot of empty parking lots out there again,” said Ferguson, who was with a client on a recent sight-seeing trip near the airport.

Before it began to rapidly develop in the 1990s and early 2000s, the Inland Empire had its share of detractors, many of those were people who scoffed at the area’s remoteness, its desert-like landscape and the lack of amenities and things to do. It’s been a regional joke to poke fun at someone whose contact information contains the area code for the region by referring to their place of residence as “the 909,” or by its abbreviation, “the IE.”

However, the region has its strong points. Those seeking an affordable home would have trouble finding a better deal.

The statewide median home price for February was $333,880, according to the California Association of Realtors. The median home price in the Inland Empire was $212,300, and home prices are up 23 percent in the area from a year ago, according to CAR.