Orange County Q3 Multifamily Market Insights: Vacancy low, rents continue to trend higher

Highlights:

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• Multifamily property performance metrics were strong in Orange County during the third quarter. Vacancy remained low, and asking rents continued to trend higher. Multifamily developers are expected to increase deliveries in the final months of the year.
• The vacancy rate inched higher in recent months as absorption levels slowed from the previous period. Area vacancy rose 10 basis points during the third quarter to 3.2 percent. Year over year, the rate is down 20 basis points.
• Asking rents continued to push higher in the last three months, rising 1.3 percent during the third quarter to $2,499 per month. Year over year, local apartment rents are up 14.3 percent.
• The local investment market slowed in recent months, as the pace of deals pulled back during the third quarter. The median price in transactions that have closed year to date is $366,400 per unit, slightly lower than in 2021. Cap rates held fairly steady to this point in the year, as most properties are selling with cap rates between 3.5 percent and 4.25 percent.

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