Los Angeles’s Next Suburb, Deep in Desert?

Palm Springs region will be the next frontier for home-buying commuters
Palm Springs region will be the next frontier for home-buying commuters

RISMEDIA, October 24, 2006?(MCT)?The lengths commuters go to work will probably get longer when Los Angeles area workers discover the Coachella Valley, according to a forecast from Inland economist John Husing.

The Palm Springs region will be the next frontier for home-buying commuters, Husing said at his annual Coachella Valley forecast for the Coachella Valley Economic Partnership. Suburban expansion will move past Beaumont, giving workers a long drive west to work.

A fresh crop of baby-boomer retirees shouldn’t be too far behind, and Husing said both should help stabilize the desert’s economy.

Long-characterized as a retirement community, the Palm Springs region will still rely on wealthy retirees to support the region economically. But a tourism-driven area is always at risk when a country has fewer dollars to spend for travel.

“The (Coachella) Valley is inordinately responsive to the ebbs and flows of the national economy,” more so than the rest of the Inland region, Husing said.

The economist said several factors, including the arrival of more retirees, could flatten the region’s economic volatility. The region’s population neared 400,000 in 2006. Husing expects it to reach 542,816 by 2020 and 657,464 by 2030.

Long devoid of commuters who live in the Coachella Valley but work much farther west, the area should prepare to be included in the Los Angeles area’s urban economy that is pushing east from Beaumont.

After the commuters will be shipping companies and railroads adding more cargo to tracks, seeking land large enough for distribution centers and roads for more semi-trailers.

In his report, Husing predicts during the next housing cycle that Banning will be flooded with construction, followed by North Palm Springs and Desert Hot Springs.

Young people moving up in the economic ranks will also be crucial to the desert region and should be fostered, Husing said.

“They’re the ones that are going to provide the income for us to retire,” said Rick Daniels, president of the Coachella Valley Economic Partnership. The group launched an education initiative in 2005 that promotes high school academies and training in health care, multimedia and technology. Husing pointed to rising test scores among the area’s three school districts since his last forecast that bode well for the region’s future.

What remains an issue is housing, Husing said.

“This area is vulnerable,” said Husing. But unlike the housing bubble burst in the ’90s, the Coachella Valley won’t be adversely affected by interest rates or jobs but rather sky-high prices.

Consumers aren’t sure if it’s the right time to buy a $481,000 house, the median price for a new Coachella Valley home during the second quarter of this year.

“What do you do when you’re confused? Nothing,” Husing said.

Bob Marra, publisher of economic data publications Wheeler’s Desert Letter and the Public Record, said a home-buying standstill will be an overall stigma and emphasized the need for affordable housing. “It’s our biggest problem.”

“Let’s get a little denser,” he said of housing designs.

New-homes sales dipped slightly in 2005 compared to the year prior from 5,535 to 5,490.

Retail Sales Per Capita:

Montclair: $36,549

Big Bear Lake: $31,514

Palm Desert: $30,806

Ontario: $30,336

Rancho Mirage: $29,876

Bank Deposits Per Capita:

Indian Wells: $62,967

Palm Desert: $39,330

Big Bear Lake: $37,270

Palm Springs: $32,710

Rancho Mirage: $27,965

Source: John Husing’s 2006 Coachella Valley Economic Forecast report

Distributed by McClatchy-Tribune Business News.

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