That's the gist of a new report on the county's apartment market by Marcus & Millichap, whose Newport Beach regional manager, John Przybyla, says smaller deals are still being done at a brisk pace, pushing up average sales prices for apartment buildings.

"Investors have been purchasing smaller-sized deals and have pushed the average price to record highs," despite the economic downturn and despite weakness that pushed up vacancies in some segments of the Orange County market, Przybyla says. Specifically, the study points out, the average-sized property sold dropped to 23 units in 2001 from 37 units in 2000. The median price per unit rose 14% to $70,000 in the central submarket and 21%, to $74,000, in the northern submarket during 2001.

Vacancy rates should improve slightly in the next 12 months as concessions lure tenants back into luxury apartments, which have suffered the most in the economic downturn, the study concludes. At the same time, it forecasts, job growth will boost demand for apartments, producing moderate growth in rents.