Trade Group Finds Increase in O.C. Apartment Vacancies : Housing: Study shows number of empty units up half a percentage point, to 5.7%, in September compared to a year ago. Local economy is blamed.
Despite virtually no new apartment construction, more Orange County units are empty now than in September, 1992, with the cities of Garden Grove and Newport Beach showing the biggest jump in apartment vacancies, according to a new survey.
Apartment vacancy rates increased half a percentage point to 5.7% in September of this year from last fall, according to figures released Friday by the Apartment Assn. of Orange County, a nonprofit trade group.
“The half of a percent increase by itself is not that significant. However, it is basically indicative of what is going on with the local economy,” said Esmael Adibi, director of the Center of Economic Research at Chapman University. “Apartments are usually for job entry, and what’s happening is that we are not creating jobs. Also, the job losses are extending to the service and retail sector, people who typically rent apartments.”
The association’s survey represents 63,000 rental units or about 19% of the available apartments in the county as of Sept. 15.
The proportion of countywide vacancies in September was lower than in April this year, when the apartment vacancy rate hit 6.8%. However, vacancy rates historically are lower in the fall, the survey noted.
Compared to the fall of 1992, vacancies in Garden Grove increased almost three percentage points to 8%, and Newport Beach saw a rise of almost two points to 6.2%, the survey found.
Some cities saw declining vacancy rates, though. In Brea, vacancies declined more than three percentage points to 2.5%, and in Fountain Valley the rate fell more than two points to 5.2%.
Factors that contribute to higher vacancy levels include people buying homes, doubling up to share apartments and a trend among young adults to move back in with their parents to save money, said Ralph Kent, executive vice president of the association.
He noted that apartment vacancies in the county have hovered between 5% and 6% for about three years.
Orange County numbers still look good when compared to those for the rest of the state, according to the California Apartment Assn. in Sacramento. This year, the San Francisco area has had an average apartment vacancy rate of 7%; Sacramento has averaged about 9%; the San Gabriel Valley, 9.4%; and the South Bay area of Los Angeles, 11.7%.
The Orange County study found that local vacancy rates were highest for two-bedroom and studio or single apartments, with three-bedroom units showing the lowest vacancy rates. In addition, the vacancy rates were lower among units priced at more than $1,100 a month.
“I think it was very surprising that vacancy rates were higher in the apartments renting for $650 or less,” Kent said. “Typically, it’s been the more expensive beachfront stuff with the higher vacancies.”
Adibi said that is probably because of an increasing number of retail and service sector workers who have lost jobs and can no longer afford single apartments renting for $650 a month.
Apartment Vacancy Rate Increases The vacancy rate for Orange County rental units has risen half a percentage point since last fall. However, the rate is down by more than a point since April. Sept. 15
Total Total Vacancy Year units vacant rate 1992 42,282 2,211 5.2% 1993 63,533 3,635 5.7%
APRIL 15
Total Total Vacancy Year units vacant rate 1992 53,596 3,731 7.0% 1993 63,405 4,318 6.8%
Source: Apartment Assn. of Orange County
