Orange County’s multifamily market in Q3 2025 remained exceptionally tight and stable, with vacancy holding at 4.0% amid steady absorption and limited new supply. Demand was supported by strong job growth, improving affordability, and moderating domestic outmigration, leading occupancy rates to stay well above national norms. Rent growth remained modest at 1.6% year-over-year, as operators prioritized maintaining near-full occupancy rather than pushing rents aggressively. The average asking rent reached $2.8K per unit, with leasing incentives still common for newer, high-end properties.

 

While overall rent gains trailed historical averages, the combination of solid employment fundamentals, measured construction activity, and consistently high occupancy positions the Orange County market for gradual rent acceleration heading into 2026.

 

Key Findings

• Despite national vacancy rising to 8.3%, Orange County’s vacancy rate held firm at 4.0%, the second lowest in the nation, supported by persistent housing demand and limited new supply.
• Demand in the metro has been strengthened by ongoing job growth, increased affordability, and a rebound in international immigration. While positive, absorption remains below historic averages due to a slowdown in construction starts.
• A lack of available land for groundbreakings and difficult approval processes has limited construction. However, deliveries are forecast to mirror the five-year high of 2,800 units in 2024 by the end of this year.

 

Orange County Multifamily Supply & Demand Dynamics

Source: CoStar Group, Inc.

 

Orange County Demographics

Source: CoStar Group, Inc.

• Unemployment Rate: 4.2%
• Current Population: 3,174,714
• Households: 1,103,626
• Median Household Income: $119,448

 

Orange County’s economy continues on a measured yet positive trajectory, supported by a diverse employment base and strong institutional anchors. While job growth has lagged the national average since mid-2022, rising less than 1% above pre-pandemic levels versus over 5% nationally, the region’s tight labor market and limited workforce availability have tempered recovery. Despite this, unemployment hovers around 5%, remaining below the state average and close to the national rate. Orange County’s economy benefits from a balanced mix of industries. Major employers such as The Walt Disney Company and the University of California, Irvine, along with key biotech and medical device firms like Edwards Lifesciences and Abbott, continue to anchor long-term economic resilience and innovation in the region.

 

Top Orange County Employers

Source: OC Business Journal

• Walt Disney Co.
• University of California, Irvine
• Providence Southern California

 

Population, Labor Force, & Income Growth

Source: CoStar Group, Inc.

 

Orange County Multifamily Construction

Construction activity remained steady but measured, with about 6K units under construction, representing 2.3% of the county’s existing apartment inventory. Development continues to be heavily concentrated in Irvine, led by the Irvine Company’s large-scale projects such as the Marketplace Mall redevelopment and Pacific Place at Irvine Spectrum. Several additional projects broke ground in early 2025, including Avella II in Irvine, 10231 Slater Ave in Fountain Valley, and The Met in Santa Ana. Despite strong demand, new development remains constrained by limited land availability and stringent approval processes. As of Q3, 532 units were delivered and 577 absorbed, reflecting a market where demand continues to match supply growth. Looking ahead, redevelopment of mall properties signals a growing trend toward adaptive reuse projects as Orange County’s housing pipeline evolves.

 

Units Construction Starts

Source: CoStar Group, Inc.

 

Units Under Construction

Source: CoStar Group, Inc.

 

Orange County Multifamily Sales

Investment activity remained resilient despite elevated interest rates and tighter lending conditions nationwide. Quarterly sales volume totaled approximately $159 million, with an average price per unit of $447,000 and cap rates around 4.4%, reflecting continued investor confidence in the market’s fundamentals. Buyers remain attracted to Orange County’s low vacancy, measured rent growth, and limited supply risk, which together support stable asset performance. Institutional investors and private buyers, particularly those utilizing 1031 exchanges, continued to pursue both long-term and value-add opportunities, especially in coastal areas. While asset values have moderated from pandemic-era highs, the market’s strong demand base and steady pricing trends indicate that investor sentiment remains positive.

 

Orange County Multifamily Sales Volume

Source: CoStar Group, Inc.

 

By the Numbers

Q3 2025 | Source: CoStar Group, Inc.

•  Sales Volume: $159M
• Price Per Unit: $447K
• Cap Rate: 4.4%
• Vacancy Rate: 4.0%
• Rent Growth: 1.6%
• Asking Rent Per Unit: $2.8K
• Under Construction: 6.0K units
• Delivered: 532 units
• Absorbed: 577 units