Orange County’s apartment vacancy rate saw a slight increase of 10 basis points in the fourth quarter of 2023, according to a report by Northmarq. The current vacancy rate stands at approximately 3.6%, marking the first annual rise since 2018.
Northmarq’s Pete O’Neil noted that there has been an uptick in new supply entering the market since mid-2022, following several years with minimal additions. While there was a slowdown in pace during Q4, O’Neil predicts that with more development activity expected in the near future, vacancy rates will continue to rise. Despite this trend, asking rents have remained stable throughout Orange County.
Looking ahead to 2024, O’Neil believes that Orange County’s investment outlook is somewhat mixed. On one hand, its low vacancy rates make it an attractive market for investors and modest rent growth is expected; on the other hand,the introduction of new inventory could lead to increased transaction volumes as seen with over a dozen newly constructed properties trading between $400k-$650k per unit since early-2021.
This post highlights how OC maintains some of the lowest apartment vacancies nationwide despite recent increases and was originally published on Connect CRE.
