Orange County Multifamily Deliveries Surge but Occupancy Holds Above 95%
New multifamily deliveries have picked up across Orange County, putting pressure on fundamentals from rent growth to occupancy, according to a new market report from Colliers.
In the second quarter, new supply surged to 2,244 units, which is fourfold higher than the amount seen in the same period last year. Moreover, this was the highest amount of deliveries seen since the third quarter of 2024. Interestingly, all of the product was delivered in the Irvine submarket.
Occupancy compressed, as a result, dropping by 50 basis points year-over-year — but the rate remains at a strong 95.6 percent in the market. "A surge of new deliveries pushed vacancy higher across the market," Colliers said.
Also, investment activity weakened, with sales volume plunging by 34 percent to $368 million. Meanwhile, the average price per unit at $419,276 was relatively unchanged.
The other notable trend is the considerable slowdown in rent growth, which averaged roughly 10.8 percent over 2021 and 2022.
"Over the last two years, annual rent growth has remained significantly lower at around 1.5%, with Q2 2026 coming in at 1.4% year-over-year," Colliers said in the report. Average monthly rents are now $2,743.
Even with all that taken into account, the multifamily sector in Orange County still looks like it's in strong shape. Demand remains positive and occupancy remains well above 95 percent. Absorption came in at 1,159 units in the second quarter, down from 816 in the same period a year ago.
Plus, while deliveries have started to surge, construction is slowing considerably. Just 3,929 units were underway in the second quarter, well below the 7,323 posted a year ago.
Source: GlobeSt/ALM