Orange County Multifamily Report – Summer 2020

As one of the country's first areas hit by COVID-19 economic woes, the county registered significantly weakened fundamentals going into the summer.
Orange County rent evolution, click to enlarge
Orange County rent evolution, click to enlarge

Orange County was one of the first regions to impose stringent lockdown measures to contain the spread of the coronavirus, and this was reflected in the multifamily market’s evolution. The metro’s average rent contracted 0.5 percent on a trailing three-month basis through May, 30 basis points lower than the U.S. rate. Still, the county’s $2,121 average is well above the $1,460 national figure.

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Despite its robust economy, nearly 5.2 million unemployment claims were filed in California during the first three months of the pandemic. Still, while only three sectors registered job gains in the 12 months ending in March, the unemployment rate rose to 13.8 percent in April, below the 14.7 percent national rate. The leisure and hospitality sector was also badly hit; a California State University, Fullerton study calculated that Disneyland’s closure is costing Southern California some $23 million per day. In mid-June, California’s economy began reopening, but by late June Gov. Gavin Newsom had paused the reopening of additional sectors in 15 counties, including Orange County.

Orange County sales volume and number of properties sold, click to enlarge
Orange County sales volume and number of properties sold, click to enlarge

Transaction activity, already dampened by the recent rent control bill, has nearly halted, with only $62 million in multifamily assets trading in the metro in the first five months of 2020. The county had 4,635 units underway as of May and 849 apartments delivered during that period. Yardi Matrix expects rents to remain at a 0.5 percent decline through year-end.

Read the full Yardi Matrix report.