Rents at Large Complexes Rise as Occupancy Tightens

As single-family home prices in Orange County continue to rise, the apartment market is charting a similar course.

Monthly rents in Orange County’s largest complexes rose 6.7% from a year ago in the July through September period to a record $1,017. That ranks as the seventh-highest average rent in the nation behind San Francisco, San Jose, Boston, Oakland, Philadelphia, and San Diego, according to M/PF Research Inc., a rental market research firm based in Dallas.

Orange County rents are 17% above the national average of $869. But occupancy rates, which are tightening across the nation, are even higher in Orange County at 97.3%. Such a level indicates that landlords have a willing renter before an apartment is available.

Limited apartment vacancies have triggered faster rent growth. The report notes that jobs are being created at a pace that far exceeds new rental construction, making Southern California the highest-demand market in the nation.

Rent increases in Los Angeles, Riverside, San Diego and Orange counties exceeded the national average, said Ron Witten, president of the research firm. “The nation’s real hot spot for rent growth is Southern California,” he said.

Through the first nine months of the year, building permits were issued for 2,794 multifamily units. That represents a 22% increase over the same period last year, according to the Construction Industry Research Board, a Burbank-based real estate research firm.