If the US recession has an epicentre in California, it may be the sprawling, working-class neighbourhoods of an area east of Los Angeles known as the "Inland Empire" full of boarded-up homes, vacant storefronts and jobless workers.

Now locals see signs that Riverside and San Bernardino counties, one of the fastest-growing US regions during the housing boom and one of the worst affected by the housing crash, may have hit rock bottom and started the long road back.

The area still faces tough years coping with overbuilt neighbourhoods of foreclosed homes, jobless rates over 10 per cent, a poorly educated workforce and scores of empty warehouses built for a once booming trade industry. But experts say there is room for optimism for the twin counties, with a combined economy larger than some US states and a population that grew 26.5 per cent from 2000 to 2008.

The Inland Empire, 50 miles east of Los Angeles, is now home to more than four million people, the country's 14th largest metropolitan area.

"The fact that things are pretty crummy in the Inland Empire right now doesn't mean they are going to stay that way," said Jerry Nickelsburg, senior economist at the UCLA Anderson Forecast. "This is not Detroit. There is no big structural adjustment happening. This is a recession."

Among the positive signs are rebounding home prices and sales, driven partly by investors but also young families finding they can afford a home for the first time. In March, home sales rose 64 per cent in Riverside County and 89 per cent in San Bernardino County compared with a year earlier.

"The interest rates and the market are now such that it invites people who have jobs to buy homes, Riverside mayor Ron Loveridge said. "You are seeing the first major increase in house-buying out here since the subprime meltdown in 2007."

But the poor job market makes that trend tenuous.

"That's the confounding thing in trying to sustain home ownership, the unemployment out here,"" Mr Loveridge said.

Lower-middle income families flocked here to buy four-bedroom homes at affordable prices, at least compared to nearby Los Angeles or Orange counties. But with bad loan terms and then job destruction, the Inland Empire became a foreclosure nightmare. There are more than 4,000 foreclosed homes in the city of Riverside alone and more defaulting all the time.

San Bernardino mayor Pat Morris says some new jobs will come in transportation with the expansion of a major freeway and a planned redevelopment of the city's downtown, both made possible with federal stimulus money.

San Bernardino was a 1850s Mormon settlement that staked its fortune as a transportation hub and rail link, its mountains serving as a backdrop for the 1940 film The Grapes of Wrath. And it has had its share of economic woes.

The 1994 closure of Norton Air Force Base and the loss of its 10,000 jobs was a defining moment. But Mr Morris says the completion of a 15-year project to transform the shuttered base into a major international airport will provide new jobs.

With affordable housing and the largest tracts of undeveloped land in Southern California, he says the area has not lost its appeal.

"We will stand tall when the economy turns and people want to get into the business of home ownership again," Mr Morris said.

Meanwhile, commercial real estate has begun to show signs of life. In April, Hong Kong apparel distributor IDS USA signed a five-year lease on a 645,000 square foot warehouse, one of the largest leases of the year in Southern California.

IDS chose the Inland Empire because its location makes distribution possible to Southern California, Phoenix, Las Vegas and San Diego from a single hub.

"In the last 60 days, maybe coincidental to the signing of this lease, the activity level has really picked up," said Kim Snyder, managing director of AMB Property, which owns the building. "We've seen that pressure valve that was turned really tight towards the end of last year, a little steam being let out now."

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