There is more speculations in the Inland Empire. Why ?
There is more land in the IE for builders to build new homes. And speculators prefer new constructions. With new constructions, the purchase price is set at the time that the contract is signed. While prices were going up, the speculator get the appreciation while the home is being built (6 months), without incurring any carrying cost.
This results in more surplus homes in the IE. Thus, more severe price declines.
