By Adriana Pop
Renter demand remains elevated in Orange County, fueled by a rapidly expanding economy and population gains. Large companies, as well as startups, are drawn to the market’s highly educated labor pool. The tech sector is becoming particularly strong, generating an increase in high-paying professional jobs. Hospitality employment is also rising, sustained by record tourism activity. Meanwhile, more and more construction cranes are cropping up throughout the county, especially for office and housing projects, leading to an almost complete recovery of the construction jobs that were lost during the recession.
The high barrier to homeownership combined with a limited supply of new apartments has pushed multifamily occupancy to one of the highest levels in the country. Consequently, rents have risen to unsustainable levels for many residents. Nevertheless, Orange County is still more affordable than some of its West Coast peers, including the Bay Area, West Los Angeles and Silicon Valley.
The market’s stability and revenue growth opportunities are drawing both local and foreign investors. Transaction volume in 2016 climbed to approximately $1.2 billion, its highest level in the current cycle. The above-trend job growth coupled with the tepid supply of new units will bolster demand for apartments, leading to a rent increase of 6.5 percent in 2017.
Read the full Yardi Matrix report.