Caught in a tightening market, Orange County renters paid a record $969 a month in the fourth quarter, up 7% over the same period a year ago, a real estate research firm reported Friday.
Analysts said the strong economy, generating more jobs and some of the lowest unemployment rates in the state, drove up demand for rental units, and in turn, pushed prices in Orange County higher.
"Production for rental and for-sale housing is not keeping up with demand in Orange County," said Richard Gollis, a principal at the Concord Group, a real estate advisory firm based in Newport Beach.
"We're not meeting the needs of families, the traditional core of the rental market who can't afford to buy a house in Orange County," Gollis added. "We're continuing to see rents increase in all sectors."
Since 1994, rents have increased 19% in Orange County, making it the most expensive area to rent in Southern California, according to RealFacts, a Marin County firm that conducts a quarterly survey of renting in the state's major counties.
Over the past year, the average monthly rental price in Orange County rose $64, according to RealFacts, which surveyed 462 Orange County complexes with at least 100 units. The survey included more than 109,000 units throughout the county's 31 cities.
Rents in Newport Beach topped the list, averaging $1,579 a month. Stanton claimed the least expensive market, as rents averaged $775 per month.
Despite escalating rents, apartment complexes were crowded throughout the county.
In fact, only a handful of cities reported occupancy rates below 95%, the benchmark figure that determines an overheated market. At that rate, owners have enough time to clean and advertise their properties when a tenant leaves, but with most of the county above that level, analysts said new renters are lined up before tenants move out.
As lower-income families have struggled to find housing, the lack of affordable apartments has emerged as a major concern among residents, according to the 17th Orange County Annual Survey, released last year by UC Irvine.
Contributing to the crunch, apartment construction has dropped off significantly in recent years, partly because of rising land costs.
Indeed, fewer apartment units were built from 1992 to 1997 during the housing industry's slump than in 1988 alone, when nearly 7,000 units went up, according to Research Network Ltd., a Rancho Santa Margarita firm that tracks Orange County's apartment market.
