May 7, 2026

New supply jumps as rents continue to rise in Orange County’s multifamily market

Q1 2026

Orange County multifamily market overview

Multifamily performance in Orange County started the year off on a positive note, with rents beginning to climb again while the vacancy rate held steady. Consistent renter demand has helped keep operating conditions favorable, as roughly 2,400 units were absorbed during the past 12 months, in line with the preceding 12 months. The pace of construction has picked up to this point in the year, with projects totaling nearly 900 units delivered in the first quarter, up from around 300 units at the same point in 2025. So far this year, all significant deliveries have been in Irvine, and this submarket has performed well. Despite being the most active submarket for recent deliveries in Orange County, Irvine posted a year-over-year improvement in vacancy while rent growth tracked the market rate during this period.

Multifamily investment activity in Orange County was fairly steady during the first quarter. While current activity is lagging long-term volumes, it is in line with the market’s trailing three-year quarterly average. Per-unit pricing has ticked higher to this point in 2026, even as Class C properties have accounted for nearly all of the transactions across the county. To this point in 2026, Class C pricing has increased by 32%, pushing above the Class B median price in 2025. This surge in Class C pricing can be attributed to successful value-add strategies involving recently renovated properties with competitive amenity packages. Examples have included gyms, playgrounds, and other amenities typically found in higher-tiered properties. The bulk of the sales that have closed this year have been in Garden Grove and Anaheim.

Looking ahead for Orange County:

The resilience of fundamentals that Orange County has exhibited in recent years should continue throughout 2026. With projects totaling roughly 4,400 units on track to be completed this year, 2026 is set to record the highest number of annual deliveries in more than a decade. These units will be delivered during a period when employment conditions are likely to remain soft in Orange County. Despite these factors, the vacancy rate is expected to rise by only 30 basis points this year, remaining relatively stable as it typically does in this market. Meanwhile, rent growth should outpace 2024 and 2025, though gains are forecast to remain modest.

Transaction activity in Orange County will likely remain light compared to historical norms, though 2026 should meet or slightly exceed the level of activity recorded in any of the trailing three years. The mix of properties that change hands is expected to remain bottom-heavy, though there will likely be at least a few Class B transactions. Class A sales should remain limited, falling short of last year when three of these properties traded. This trend of lower-tier properties making up the majority of sales may ease once the wave of construction subsides. For now, however, Class B and Class C assets offer tighter vacancy and greater upside, attracting investors who may otherwise pursue newer vintage properties.