From an economic conference sponsored by the University of Redlands:

The unemployment rate in the Inland Empire is currently 9.1%, double what it was two years ago.  It’s forecasted to reach 12.4% in two years and gradually improve from there, although the forecast, from Beacon Economics, predicts that it won’t reach its pre-recession level until 2013.

Inland Empire unemployment rates (August):

2006: 4.8%

2007: 6.1%

2008: 8.8%

(Photo of Augie’s Coffee Shop, from an odd LA Times article on Redlands.)

Via the Wall Street Journal, Zillow has just published their latest real estate survey including data for the Inland Empire.  Zillow reports that home prices in the area are down 36.0% since their peak in the second quarter of 2006.  A majority, 62.1%, of homeowners in the Inland Empire who have purchased their homes in the last five years are under water — that is, they owe more than their house is worth.  Sixty five percent of homes sold in the IE in the second quarter of 2008 were sold for a loss and, amazingly, more than half of the sales were of foreclosed properties.  (The average foreclosure transaction rate for the past five years was 8%.)

Redlands home prices are down 7.7% quarter-over-quarter and down 26.1% year-over-year.

The Journal estimates that housing prices in the region need to drop an additional 24% to restore the pre-boom price/income ratio, a measure of affordability.  Clearly, there’s an imbalance in the kinds of jobs available in the region and the relative cost of housing, but I’m not sure if their measure of historical affordability (the average ratio of home prices to household income for the period 1985 – 2000) is accurate.  But here’s a real-world example of the problem:

Assume a family of four with a household income of $28,000/yr.  With the absurd mortgages on offer at the top of the market in 2006, they were able to qualify for a $410,000 loan, the annual payments for which are greater than their gross income.  They were able to pay for it with an $80,000 line of credit, taken out at the same time as their mortgage.  With their house deep under water, it’s a perfectly reasonable economic decision for them to just walk away from house.  They had expected to ride the wave of rising housing prices but they had bad timing and got caught as the wave broke.

I have referred before to my theory of the standard history, the (only partially sarcastic) idea that everything was invented between 1880 and 1910. Fortunately, the history of the Citrus Empire, what later came to be the Inland Empire, follows this pattern quite nicely:

1. Pre-history

Before 1870, you had Spanish and Mexican settlers, Native Americans, Mormon pioneers, the random Anglo gold prospector and so on.  But it’s a fuzzy, out-of-focus picture of sparse settlement in a dusty backwater.

2.  Invention

In the time of great change, here starting perhaps in 1870s, everything that we understand as foundational to the Inland Empire is laid out.  At the beginning of the period, there’s nothing.  But by the end, you have railroads linking the region with the rest of the country, irrigation to support a booming economy based around citrus, and established settlements in the form of the citrus colonies of Riverside, Pomona, Ontario, Redlands, Claremont, and so forth.  Even the stories that we commonly associate with California — especially the healthy lifestyle and the abundance of the land — were created and propagated during this time.  A rough timeline, drawn largely from Douglas Cazaux Sackman’s Orange Empire: California and the Fruits of Eden, looks like this:

1873: “Washington” navel oranges arrive in Riverside

1877: first shipment of oranges from southern California

1882: Santa Fe transcontinental railroad

1886: citrus fair in Chicago

1886: refrigerator cars on the Southern Pacific railroad introduced

1889: 452,000 boxes of citrus shipped

1893: World’s Columbian Exposition in Chicago

1898: Sunset magazine, the “in-flight magazine of the Southern Pacific Railroad” introduced

1899: 6,000,000 boxes of citrus shipped

1907: Citrus Experiment Station, which would be the University of California at Riverside, established

1909: 14,500,000 boxes of citrus shipped

3.  All the rest

The third phase, after about 1910, is really just explication; the themes, and the physical infrastructure, were in place and the growth that subsequently happened simply filled in the frame that was drawn in the previous phase.  Coincidentally, our house in Redlands was built in 1910, so I can draw an imaginary line from the family that first lived in this house down to my own, and while there have been many changes over that time, the basic patterns — the structures of everyday life — were by that date already in place, I believe.

The Inland Empire has atrocious educational attainment rates.  Only two thirds of the region’s high school students graduate and only one third them go on to college.  Among college-age (18-24 year old) IE residents, only 18% were attending college in 2007, marginally up from 15% in 1993.  Less than a quarter of all IE adult residents have a college degree, compared to a national average of 38%.