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Market Report

Orange County Multifamily Investment Forecast

2022 Outlook

Record Demand Across Apartment Tiers Establishes Orange County as Nation's Tightest Apartment Market

Homeownership hurdles and high-paying job creation support historic conditions. Renter demand for high-end and mid-tier apartments surged in Orange County over the past year, reducing vacancy in both the Class A and B sectors below 2 percent. Job creation by professional and business services firms supported the rise in absorption with the employment segment responsible for roughly 20 percent of the total jobs added last year. While many of these positions provided individuals with an above-average wage, most professionals were unable to afford the metro's median home price, which soared beyond $1 million. With limited housing options available these individuals will continue to filter into the renter pool in 2022, coinciding with the delivery of large-scale projects in Santa Ana, Costa Mesa and Irvine. Current fundamentals indicate these units will be well received, allowing Class A vacancy to rank among the nation's lowest. A lack of available luxury units may force some prospective renters to lease Class B apartments, further compressing conditions in the subsector.
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