OC Apartment Market Finds Its Balance

Dan Blackwell

The Orange County apartment investment market is transitioning into a neutral market between buyers and sellers. This trend has emerged in 2019 as rent growth has slowed, the Fed has changed positions on interest rates and changing market sentiment about future growth. This transition could mean more opportunities for buyers that have been sitting on the sidelines or for buyers looking for exchange opportunities in Orange County.

“Overall, the market remains strong but showing early signs of transitioning from a sellers’ market into more of a neutral market,” Dan Blackwell, SVP at CBRE, tells GlobeSt.com. “Common feedback is that most of the positives are already priced in the assets and there are concerns in the short-term that we could see some pullback. Volatile interest rates, leveling off rental growth and future rent control concerns for California are putting upward pressure on cap rates. In general, there is a widening gap between pricing expectations of buyers and sellers. This will likely cause transaction volume to be less in 2019 than in recent years. Overall, the number of days on the market is trending upward and price reductions are more common to see.”