Orange County Real Estate Market Update

September 3, 2025

Home affordability has been at crisis levels ever since mortgage rates rocketed higher in 2022, impacting the housing market in so many ways.

INVENTORY:

The active listing inventory in the past couple of weeks decreased by 142 homes, down 3%, and now stands at 4,869, its largest drop of the year. Orange County reached its peak a month ago, marking its first normal July-to-August peak since 2022. Last year, there were 3,599 homes on the market, 1,270 fewer homes, or 26% less. The 3-year average before COVID (2017-2019) was 6,569, which is 35% higher. From January through August, 26% fewer homes came on the market compared to the 3-year average before COVID (2017-2019), 7,561 less. Yet, 2,281 more sellers came on the market this year than last, and 5,053 more compared to 2023.

DEMAND:

Buyer demand, the number of pending sales over the prior month, decreased by 93 homes, down 6%, and now stands at 1,559, its largest drop of the year. Last year, there were 1,470 pending sales, 6% lower than today. The 3-year average before COVID (2017-2019) was 2,438, which is 56% higher.

MARKET TIME:

With demand falling faster than supply, the Expected Market Time, the number of days to sell all Orange County listings at the current buying pace, increased from 91 to 94 days in the past couple of weeks, its highest end-of-August level since 2018. Last year, it was 73 days, substantially faster than today. The 3-year average before COVID (2017-2019) was 82 days, which is also faster than today.

LUXURY:

In the past two weeks, the Expected Market Time for homes priced between $2.5 million and $4 million increased from 180 to 196 days. For homes priced between $4 million and $6 million, the Expected Market Time increased from 202 to 221 days. For homes priced above $6 million, the Expected Market Time increased from 321 to 540 days.

DISTRESSED HOMES:

Short sales and foreclosures combined, comprised only 0.1% of all listings and 0.3% of demand. Only four foreclosures and three short sales are available today in Orange County, with a total of seven distressed homes on the active market, unchanged from two weeks ago. Last year, nine distressed homes were on the market, similar to today.

CLOSED SALES:

There were 1,934 closed residential resales in July, down 5% compared to July 2024’s 2,034 and up 5% from June 2025. The sales-to-list price ratio was 97.5% for Orange County. Foreclosures accounted for 0.05% of all closed sales, and short sales accounted for 0.05%. That means that 99.9% of all sales were sellers with equity.