Orange County Multifamily Report – October 2022
While the economy recovered, the market is once again slowing down.
Orange County rent evolution, click to enlarge
Orange County’s recovery continued well into 2022, but current economic conditions are affecting the multifamily market. Rent growth moderated to 0.5 percent on a trailing three-month basis through August, to $2,721, with the Renter-by-Necessity segment leading gains. The average occupancy rate in stabilized assets shifted down 30 basis points year-over-year as of July, to 97.4 percent, pointing to a still-tight rental market.
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Orange County sales volume and number of properties sold, click to enlarge
The unemployment rate in Orange County stood at 2.8 percent in July, a solid improvement from 4.2 percent in January, according to preliminary data from the Bureau of Labor Statistics. The rate placed it behind only San Francisco (2.5 percent) among California’s major metros and ahead of the state (3.9 percent) and the U.S. (3.5 percent) rates. The employment market added 78,800 jobs in the 12 months ending in June. Just one sector contracted—financial activities lost 1,000 positions. The ongoing recovery of the leisure and hospitality sector (37,600 jobs) led gains, boosted by the rebound of conventions and tourism.
Developers added 1,232 units through August and had 8,400 underway. Compared to last year’s corresponding interval, figures show a drop in both construction starts and deliveries. Meanwhile, investment remained high, with the volume surpassing $1.2 billion as investors traded mostly RBN assets. The per-unit price marked a 13.7 percent year-over-year increase, to $434,025 in August.
