According to Marcus & Millichap, hiring activity is expected to pick up this year, following minimal gains in 2007 due to the housing slump and collapse of the subprime lending market. "Despite some recent local economic slowing, Orange County apartment market fundamentals remain among the strongest in the nation," the Marcus & Millichap report points out. Hendricks & Partners sounds a similar theme. "While the credit crunch put the breaks on the local economy, local experts predict that as investors become more comfortable with the new limitations, consumers will have an easier time obtaining a mortgage, restoring balance to the market," a Hendricks & Partners study says. In the near term, it sees the effect of the credit crunch and difficulties consumers are having obtaining financing as a benefit to the apartment market.

Major owners and investors in the Orange County multifamily arena include a number who have long been long-term holders of their properties, most notably the Irvine Co. In fact, the county's largest landowner recently debuted the first stage of its new 890-unit Enclave at South Coast apartment complex, the largest apartment project to open in Costa Mesa in 15 years. The complex is planned to eventually include 46 three-story buildings on a 40-acre site near the South Coast Plaza shopping complex and other amenities in the South Coast Metro district of Orange County.

Marcus & Millichap says that the emerging demographic trends in the county "support a positive outlook for properties in the metro," pointing out that much of the market's employment growth in 2008 will occur in the leisure and hospitality, and retail sectors, where employees tend to be renters. Home prices have declined in recent quarters, but "affordability remains a challenge," the report notes.