As of January 2017, median prices for homes in the metro stood at $635,000, up 2.6% from the prior year, with volume up 3.5%, Litwak points out. “Even though prices are now at the same general level as peaks reached in 2007, homes are still unaffordable to most local households.”

In addition, low vacancy rates have persisted in the apartment market for many years, never going above 8% in the last 10 years and historically staying below 5%, she adds. “Indicators point to long-term demand for multifamily rental housing, especially given the high cost of single-family housing.

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COSTA MESA, CA—The number of consumers with disposable income and the emotional/social element of multi-use projects are a couple of reasons these developments are heating up in the Orange County market, Housing on Merit's executive director Jennifer Litwak tells GlobeSt.com. Litwak will be speaking on the panel “Multi-Use: Ways to Merge the Retail, Office and Multi-Family Sectors” during RealShare Orange County on Aug. 24. We caught up with her to discuss this topic and the types of multi-use developments that are in demand in this market.

Litwak says the drivers for multi-use development in Orange County are many, including the number of consumers in this market, the disposable income of consumers, the financial incentives that mixed-use brings to businesses and the reduced risk to investors due to diversity versus a single-asset type investment. She says the emotional and social elements to these projects and the live/work/play aspect of them help foster a sense of community and a walkable urban experience within these projects.

As for the types of multi-use properties most in demand in Orange County, Litwak approaches this topic from a multifamily perspective, since her firm builds housing that “creates a bridge to permanent affordable housing for vulnerable populations,” according to its website. She cites Fannie Mae's Multifamily Metro Outlook, which says that since the beginning of 2006, around 6,900 condo units were completed, though fewer than 600 condo units are underway and due to be delivered through Q2 2018. More than 13,700 apartment units have been completed since the start of 2012, and another 7,600 units are currently underway, the data shows. “Despite recent inventory additions, Orange County still will need a significant number of new rental units to satisfy its expected long-term growth,” says Litwak.

And, according to Marcus & Millichap's Q2 Multifamily Research Market Report for Orange County, class-A rentals in areas undergoing substantial redevelopment efforts dominate the construction pipeline. Litwak says, “Anaheim's Platinum Triangle is undergoing a significant expansion of office, retail and residential stock in an effort to redefine the area as a highly urbanized, residential and business hub. A similar transformation is happening at the Irvine Business District. In addition to these clusters, thousands of new units are scheduled to come online over the next few years, creating a possible headwind for the broader market, particularly in the class-A segment.”

As of January 2017, median prices for homes in the metro stood at $635,000, up 2.6% from the prior year, with volume up 3.5%, Litwak points out. “Even though prices are now at the same general level as peaks reached in 2007, homes are still unaffordable to most local households.”

In addition, low vacancy rates have persisted in the apartment market for many years, never going above 8% in the last 10 years and historically staying below 5%, she adds. “Indicators point to long-term demand for multifamily rental housing, especially given the high cost of single-family housing.