Apartment vacancies in Orange County rose 10 basis points toward the end of the fourth quarter of 2023, Northmarq reported. Currently they’re sitting around 3.6%, and 2023 marked the first annual vacancy increase in the market since 2018.

“The pace of deliveries has quickened since the second half of 2022, after almost no new supply was added a few years ago,” wrote Northmarq’s Pete O’Neil. Although the pace slowed down in Q4, “with the increase in development activity expected in the coming months, the vacancy rate will likely tick higher.” Meanwhile, asking rents have remained consistent in Orange County.

Looking ahead into 2024, O’Neil cited a “somewhat mixed” investment outlook for OC. “The market should benefit from one of the lower vacancy rates in the country, and the forecast for modest rent growth will appeal to investors. Further, the introduction of new inventory into the market could result in some added transaction volumes; since 2021, more than a dozen new construction properties have traded, often at prices between $400,000 per unit and $650,000 per unit.”

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