The price to rent an apartment in Orange County is on the decline, according to industry research firm CoStar Group, following steep increases over the past decade.
Statistics show prices across the county peaking in August 2022 at approximately $2.97 per square foot before gradually beginning to fall.
The downward trend accelerated in October, and prices have continued a steady descent over the past months. CoStar Group estimates the current square foot price at $2.88, representing a 3 percent drop from August.
According to CoStar, Orange County recorded the lowest level of demand for units in more than a decade during the fourth quarter in 2022.
While data indicate prices are down, some renters say they haven’t noticed.
“I would be very happy if my rent went down, or if I could find something cheaper,” Stacy Lee, a customer service representative working in Huntington Beach and living in Santa Ana, told The Epoch Times. “I wish I could live closer to work, but everything is expensive near the beach.”
Current listings on apartment rental sites reflect stable pricing at the bottom of the market, with luxury apartments and higher-end inventory offering discounts.
Attempts to incentivize renters to upgrade to higher-priced developments with luxurious appointments, more square footage, and resort-like pools and gyms with special offers and reduced rents are dragging down the mean, according to local real estate experts.
There are approximately 11,500 Orange County apartment listings on Zillow as of April 5, with an average price of $2,400 for a one-bedroom.
The national median rent is currently $1,152 for the same size rental, according to Statista, a market and consumer research firm.
The company noted that a worker in California would need to earn $37 per hour to afford an average-priced two-bedroom apartment in the state.
Apartment rents vary considerably in the region, with Laguna Beach commanding $3,275 for a one-bedroom, and Anaheim the most affordable option at $2,291, as reported in March 2023 by RentCafe, a nationwide internet listing service specializing in rental properties.
Irvine consistently rates as one of the hottest real estate markets in the state, and one-bedroom rentals in the city average $2,840.
Santa Ana has seen rising prices over the past year, with rents currently averaging $2,195.
The Fair Market Rent for Orange County, as calculated by the U.S. Department of Housing and Urban Development, is $2,113 for a one-bedroom in 2023, representing an increase from $1,905 last year.
San Francisco led the Golden State with an average one-bedroom renting for $3,330. The area saw a 9.5 percent increase year over year in rental prices, while home sales experienced significant declines in price and volume.
Rental markets have been buoyed by rising interest rates, according to market analysts, as high median prices and increased borrowing costs have dampened real estate sales across the state.
Weather has traditionally been a draw for the region, but recent storms could be impacting short-term demand for rentals, according to local realtors.
With warmer temperatures approaching, property managers are expecting vacancy rates to decrease, with demand stabilizing rental prices, according to data released March 23 by analysts at Apartment List—a global online apartment listing service and research firm headquartered in San Francisco, California.
Some economists suggest the state’s declining population and high cost of living relative to the nation are affecting the market, with net migration losses leading to less competition for rental properties, thus driving the drop in prices.
Census data indicates a drop in population from April 2020 to July 2022, with 35,000 fewer residents in Orange County. The decline follows an increase of 175,000 people in the decade prior.
