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Market Report

Orange County Multifamily Market Report

Fourth Quarter 2019

High-End Apartment Construction Ramps Up; Investors Prepare for Impending Rent Control

Household growth and high median home costs drive rental demand. A flourishing corporate base in Irvine and a pronounced tourism backbone in Anaheim continue to bolster the economy. With employers consistently bringing labor into the metro, the household growth rate over the past year ended in September was the most rapid pace since 2013. Much of this growth has been tied to high-wage job creation in financial and technology fields linked to the hundreds of Fortune 500 companies with offices in Irvine. As home prices remain out of reach for many, residents have looked toward rental housing. This strengthening luxury apartment demand has swayed construction to be primarily focused on high-end development. Although Class A inventory has been expanding, it is being quickly absorbed, as vacancy within this class dropped 50 basis points year over year to 3.7 percent as of the third quarter.

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