Orange County Housing Market Update – May 2025
Relying on the Facts
In a housing market filled with social media speculation and doom-and-gloom predictions, it’s more important than ever to separate myths from reality. Let’s break down what’s really happening in Orange County real estate—and why a crash is not on the horizon.
🔍 Myths vs. Market Reality
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MYTH 1: “The market is flooded with listings.”
REALITY: OC inventory is up to 4,595 homes, a 75% jump from last year—but we’re still far below pre-COVID norms and Great Recession levels. Limited supply continues to support pricing. -
MYTH 2: “Prices are about to crash.”
REALITY: While prices may soften slightly as inventory climbs, a crash is unlikely. The LA-OC region saw a 3% year-over-year price gain in March 2025, down from 9% in 2024. Today’s homeowners have strong credit, low debt, and record equity—nothing like the pre-2008 environment. -
MYTH 3: “Homeowners are stuck and won’t sell.”
REALITY: More sellers are listing despite higher rates. OC saw 19% more homes listed through April compared to 2024, showing that lifestyle changes are overcoming rate lock-in.
MYTH 4: “It’s smarter to wait for a big dip before buying.”
REALITY: Trying to time the market rarely works. Even a modest dip in interest rates triggers a demand surge. If you're ready financially, now could be your window to buy with less competition.
Orange County Housing Summary
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- INVENTORY: The active listing inventory in the past couple of weeks increased by 127 homes, up 3%, and now sits at 4,595, its highest level since July 2020. Last year, there were 2,620 homes on the market, 1,975 fewer homes, or 43% less. The 3-year average before COVID (2017-2019) was 6,370, which is 39% higher. From January through April, 23% fewer homes came on the market compared to the 3-year average before COVID (2017-2019), 3,306 less. Yet, 1,706 more sellers came on the market this year than last, and 3,056 more compared to 2023.
- DEMAND: Buyer demand, the number of pending sales over the prior month, increased from 1,546 to 1,621, its first rise since February. Last year, there were 1,650 pending sales, 2% more. The 3-year average before COVID (2017-2019) was 2,738, which is 69% higher.
- MARKET TIME: With demand rising slightly faster than supply, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, decreased from 87 to 85 days in the past couple of weeks, its first drop since February. Last year, it was 48 days, substantially faster than today. The 3-year average before COVID (2017-2019) was 70 days, which is also significantly faster than today.
- LUXURY: In the past two weeks, the Expected Market Time for homes priced between $2.5 million and $4 million decreased from 158 to 146 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 181 to 216 days. For homes priced above $6 million, the Expected Market Time decreased from 382 to 376 days.
- DISTRESSED HOMES: Short sales and foreclosures combined, comprised only 0.1% of all listings and 0.4% of demand. Only one foreclosure and three short sales are available today in Orange County, with a total of four distressed homes on the active market, down two from two weeks ago. Last year, six distressed homes were on the market, similar to today.
- CLOSED SALES: There were 1,863 closed residential resales in April, down 5% compared to April 2024’s 1,968 and up 3% from March 2025. The sales-to-list price ratio was 99.1% for Orange County. Foreclosures accounted for 0.1% of all closed sales, and there were no short sales. That means that 99.9% of all sales were sellers with equity.
💡Note from Hamid
Orange County’s housing market is not crashing—it’s adjusting. Rising inventory is helping normalize conditions, but strong homeowner equity and tight supply continue to offer stability. Buyers and sellers should tune out the noise and make decisions based on data and personal readiness—not headlines.
If you're thinking about buying or selling, it's more important than ever to rely on facts, not fear. Let's connect!
