Orange County Multifamily Investment Forecast
Record Demand Establishes Orange County as Nation's Tightest Market
Homeownership hurdles, high-paying jobs support historic conditions. Renter demand for high-end and mid-tier apartments surged in Orange County over the past year, reducing vacancy in both the Class A and B sectors below 2 percent. Job creation by professional and business services firms supported the rise in absorption, with the employment segment responsible for roughly 20 percent of the total jobs added last year. While wages in this sector are typically above the market average, most professionals are unable to afford the metro's median home price, which now exceeds $1 million. With limited housing options available, these individuals will continue to filter into the renter pool in 2022, coinciding with the delivery of large-scale projects in Santa Ana, Costa Mesa and Irvine. Current fundamentals indicate these units will be well received, allowing Class A vacancy to rank among the nation's lowest. A lack of available luxury units may force some prospective renters to lease Class B apartments, further compressing conditions in the subsector.