Demand Outstrips Apartment Supply

Demand for apartments in Orange County is quickly outstripping supply. The booming market here, which is dominated by developer Irvine Apartment Communities, now ranks eighth in potential revenue growth out of 52 metropolitan markets studied by Salomon Brothers Inc. According to its most recent report, apartment households in Orange County should climb 1% in the 12-month period ending November 1997, while apartment supply should grow by just .8%. This momentum should push vacancies down to 3.7% by November from 4.4% the same time last year, and could push rental rates up. Irvine Apartment Communities already has raised rents on more than half of its properties by 5%.

The high demand for apartments could continue for as long as 10 years, UC Berkeley professor Kenneth Rosen said in the Journal of Real Estate Research. Growth in the population segments aged 18 to 24 and over 65 is expected to feed demand for affordable rental housing in coming years, he said.

Melinda Fulmer covers real estate for The Times. She can be reached at (714) 966-7832.