— By Pat Swanson —
Orange County’s multifamily housing market is still facing challenges. These include rising operating expenses, such as escalating insurance costs and new regulatory standards like SB 721. However, I am optimistic that the county will experience a soft landing compared to other parts of the country.
Inflationary pressures and stringent rent control measures in areas like Santa Ana have heightened financial burdens for property owners, impacting profitability and investment decisions. Investors are increasingly favoring higher-quality, long-term assets in premier coastal locations like Newport Beach where properties have shown robust rent growth, averaging 5 percent annually over the past five years.
Our team of multifamily advisors works closely with clients to navigate this evolving landscape, emphasizing opportunities in high-demand, flight-to-quality assets. Seller-carry financing and loan assumptions have emerged as highly sought-after options, appealing to buyers seeking reduced upfront costs and flexible financing terms, while allowing sellers to maximize property value without heavy down payment requirements.
There is pent-up demand in Orange County’s multifamily housing market, particularly for properties in the right areas. Our expertise lies in identifying and leveraging these opportunities for our clients. By understanding the nuances of market demand and regulatory changes, we can help investors capitalize on the right property in the right location.
Looking ahead, proactive asset management and adaptation to regulatory changes will be essential for stakeholders aiming to maximize investment potential in Orange County’s multifamily market. It’s worth noting that potential regulatory changes, including those on the ballot for 2024, could further impact market dynamics. Despite current challenges, strategic opportunities promise continued growth and profitability for savvy investors and property owners alike.
Pat Swanson, Executive Vice President, the Swanson Apartment Team, Colliers