Strong supply and demand fundamentals limit investor activity in this SoCal market
IRVINE, Calif., March 6, 2017 – HomeUnion, an online real estate investment management firm, has announced that the single-family rental (SFR) market in Orange County remains one of the most overheated areas of the country.
“Employment growth in Orange County is strong. In fact, it is outpacing the national average,” says Steve Hovland, director of research at HomeUnion.
“However, with investment home prices exceeding $700,000, and cap rates just barely above 3 percent, both institutional and retail investors are limiting their presence in the market. Nevertheless, for investors with large cash reserves, particularly from Asia, Orange County will remain an attractive acquisition target.”
Here are some key takeaways on Orange County’s investment housing market:
- The metro’s year-over-year employment growth is projected at 2.1 percent this year, compared to 1.7 percent growth nationally.
- Single-family rental (SFR) vacancy in Orange County is expected to drop by 10 basis points to 2.9 percent.
- Rents for Orange County SFRs are anticipated to grow to $3,202 per month, up 2.8 percent from year-end 2016.
- Prices for investment homes in Orange County ended 3Q 2016 at $735,000, with nearly 80 percent of investors choosing to use leverage.
For more information on the state of the U.S. investment housing sector and market conditions in 29 metros nationwide, download the 2017 National Single-Family Rental Research Report.
HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and proprietary analytics to incorporate data on over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 11 locations. HomeUnion’s role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.
Communications Manager, HomeUnion