Orange County Q4 Multifamily Market Insights: Rents on the Rise as Labor Market Rebounds

Highlights:

  • New renter demand outpaced supply growth in 2021, and this imbalance supported tightening vacancy levels and a spike in rents. Some of the strongest market performance was recorded during the fourth quarter.
  • Vacancy declined 30 basis points during 2021 to 3.4 percent, reaching its lowest figure in the market since early 2017. The rate held steady in the fourth quarter.
  • Asking rents rose at an unprecedented rate in recent months, advancing 6.4 percent in the fourth quarter alone. Rents ended 2021 at $2,327 per month, up 19.1 percent for the full year.
  • Multifamily sales activity spiked in the second half of 2021 as the market reached new highs for transaction volume. Prices pushed higher, reaching $384,700 per unit through the end of 2021, while cap rates compressed to below 3.5 percent in the fourth quarter.

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