An increase in residential and multifamily permits will drive job growth in the construction industry in Orange County in 2018, local economists said.
Chapman University last week released its annual Orange County Economic Forecast and the outlook is strong for the county and the commercial real estate industry in the coming year.
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Construction job growth increased 5.7% in 2016 before falling to 4.8% in 2017. The Chapman economists said the decline in construction job growth last year was due to a drop in the number of residential permits.
But in the coming year, economists expect job growth in the construction industry to bounce back to 5.3% as residential and multifamily permit activity increases almost 11% to nearly 12,000 units in the coming year.
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In contrast to 2017, multifamily permits will show more strength than single-family, the study said.
Single-family home prices will continue their upward trajectory. Though more construction is on the horizon and mortgage rates are on the rise, housing affordability is forecast to continue its downward slide, the Chapman study said.
Housing appreciation in Orange County rose year-over-year from 4.3% in 2016 to 6.4% in 2017. Economists forecast 5.2% appreciation for 2018.
“Although higher mortgage rates next year will reduce housing affordability, off-setting that is a tight supply of unsold housing that is keeping upward pressure on prices,” the report noted.
Hear more about what will affect Orange County's economy and commercial real estate at our Orange County State of the Market event Jan. 23 at Hive in Costa Mesa.
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