Don’t count on a slowdown in Orange County’s still red-hot apartment market any time soon—at least in terms of rents.
A drop in new multifamily construction will contribute to higher rents and lower vacancies in the next two years in Orange County, a new report asserts.
The Casden Economics Forecast, issued by the University of Southern California, said Orange County, the second most expensive multifamily market in Southern California behind Los Angeles, will experience a 5% jump in average rent over the next two years.
The area’s current average monthly rent of $2,090 is expected to rise $109 by 2021 to $2,199, while already low levels of vacancy are slated to dip even further, to 3.3% from 3.8%.
Some 2,800 units in larger-sized apartment complexes are expected to open in OC this year, down about 1,000 units from a year ago, according to data from Marcus & Millichap.
Downsides
Not all residents here are willing to go along with the ride.
High rents may be draining OC’s talent pool, the report suggests, which cited Phoenix and Las Vegas as the top destination for workers who left the state in 2018.
“Housing is more affordable in places where land is cheaper and developers face fewer regulatory and legal barriers that, in California, delay construction and drive up legal and consulting fees,” said Richard Green, director of the USC Lusk Center for Real Estate.
—Katie Murar
