OC Housing Permit Requests Surge

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NEWPORT BEACH, CA-The number of housing-permit requests in Orange County has swelled considerably since 2010. According to locally based firm Hendricks-Berkadia, multifamily permit requests have increased by 197.8% since 2010, and single-family permit requests have followed a similar trajectory.

However, multifamily deliveries for 2013 are not predicted to surpass those of 2012. Dean Zander, Hendricks-Berkadia's senior partner and director of its institutional group, tells GlobeSt.com, “The decrease in 2013 deliveries is just the effects of a brief lull among development of some large apartment product. In 2013, Huntington Beach will lead deliveries of major apartment developments with 470 units, followed by Fullerton (350 units) and Irvine (335 units). Next year, however, Irvine will take the lead again thanks to the mega 1,750-unit Los Olivos Apartment Village. Irvine supply will grow by 2,020 units next year.”

Zander adds that several major developers are active, but three in particular have a pronounced presence. “Irvine Apartment Communities is #1 in terms of projects underway with 1,750 units in the aforementioned mega development. IAC was also the developer that was very active with 2,000+ new units last year. UDR is #2 with three underway projects and 960 units. Mill Creek Residential is #3 with two projects and 480 units.”

Developers submitted permits for 3,910 multifamily units in March, a 5.2% quarterly rise and up 25.6% annually, and Hendricks-Berkadia's Requests for single-family permits fell significantly between 2004 and 2009 and have risen modestly since then.

Developers submitted 18.1% more single-family permits by the end of March than the close of December. The 2,210 annualized permits submitted in March represented a 21.4% increase over the previous year.

The mortgage market did not fare as well as the multifamily market in terms of income trends, Hendricks-Berkadia also reports. The average monthly mortgage in the county dropped 9.4% to $2,808 per month in the first quarter, while rental rates have remained fairly level since 2004. Still, mortgages were 75.3% more than rents in March. The difference between the two closed slightly as the average asking rent increased 0.4% to $1,602 per month in the quarter.

As GlobeSt.com reported exclusively last week, Western National Group has retained the Hendricks-Berkadia team of Zander and Vince Norris, along with VP Spencer Scott, to sell Charter Apartments, a 403-unit luxury apartment community here. Irvine-based WNG—the second-largest multifamily owner in Orange County with more than 20,000 units under management—owns the property as part of Western National Realty Fund II.

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