Orange County’s housing market is moving out of the busy Spring and Summer Markets and into the Fall Market, which typically runs from late August through mid-November. As expected, the pace is beginning to cool, but the latest numbers show a market that is slowing gradually rather than experiencing a major shift.
Mortgage rates remain one of the biggest factors influencing the market. In late August, rates hovered between approximately 6.75% and 6.87%, keeping affordability and buyer confidence in focus. At the same time, inventory has likely reached its seasonal peak, while demand remains relatively steady.
Here’s what the latest numbers tell us about where the Orange County housing market stands as we head into fall.
Inventory Is Beginning to Ease
Active inventory declined by 72 homes over the past two weeks, bringing the total to 4,982 homes, a 1% decrease. This suggests that inventory likely peaked in mid-August, which is typical for Orange County’s seasonal market pattern.
Even with the recent decline, inventory is still slightly higher than last year. There are currently 113 more homes on the market than at this time in 2025, representing a 2% increase.
However, today’s supply remains well below historical norms. Compared with the pre-COVID average from 2017 through 2019, inventory is still 32% lower. The limited number of new listings coming onto the market continues to prevent supply from building significantly.
From January through July, only 18,948 homes came on the market, which was 27% below the pre-COVID average. That lack of new supply remains an important reason why the market has not shifted dramatically in favor of buyers.
Buyer Demand Is Holding Relatively Steady
Buyer demand, measured by new pending sales over the prior month, dipped slightly from 1,535 to 1,528 pending sales. In practical terms, demand is essentially flat over the past two weeks.
Compared with last year, however, demand is down 2%. It is also 60% below the pre-COVID average of 2,438 pending sales.
The biggest factor is still mortgage rates. With rates remaining near 6.75%, buyers are being more selective and are taking longer to make decisions. Demand is expected to soften gradually through the end of the year if rates remain elevated.
That said, the current numbers do not point to a sudden collapse in buyer activity. Instead, they reflect a market where buyers are still purchasing, but affordability concerns are keeping the overall pace measured.
The Market Is Moving at a Similar Pace to Last Year
Orange County’s Expected Market Time, which measures how many days it would take to sell all current listings at the current sales pace, improved slightly from 99 to 98 days.
Last year at this time, the Expected Market Time was 94 days. The difference is relatively small, showing that the market is moving at a pace similar to 2025.
Still, the market is slower than it was before the pandemic. The pre-COVID average was 82 days, meaning homes are taking longer to sell today.
The attached and detached markets are also moving differently:
- Condos and townhomes: Expected Market Time improved from 118 to 109 days.
- Detached homes: Expected Market Time increased slightly from 87 to 90 days.
Detached homes continue to move faster than attached properties, although both segments are experiencing a more measured pace.
The Luxury Market Is Showing Unexpected Strength
The luxury market continues to stand out as one of the stronger segments in Orange County.
For homes priced above $2.5 million, inventory declined from 1,019 to 995 homes, a 2% decrease. At the same time, luxury demand increased from 197 to 208 pending sales, representing a 6% improvement.
That combination of lower inventory and higher demand helped luxury Expected Market Time improve from 155 to 144 days. This is the best reading of the year and the lowest since February 2025.
The year-over-year comparison is even more encouraging. Luxury inventory is down 16%, while luxury demand is up 44%.
However, not every luxury price range is moving at the same pace. Homes priced between $4 million and $6 million saw Expected Market Time increase from 168 to 185 days, showing that buyers remain more selective in certain high-end segments.
Distressed Sales Remain Minimal
Distressed properties continue to represent only a very small portion of the Orange County housing market.
Short sales and foreclosures account for just 0.2% of all listings and 0.5% of demand. This confirms that the current market is not being driven by widespread financial distress.
Closed sales also remained stable. There were 1,930 closed sales in July, nearly identical to July 2025.
The sales-to-list-price ratio was 99.5%, and 99.9% of sellers closed with equity. These figures reinforce the fact that, while the market has slowed, homeowners are generally not being forced into significant discounts or distressed transactions.
What This Means for Sellers
For sellers, pricing accurately is more important than ever.
The market is no longer moving quickly enough for an overpriced listing to rely on strong demand to generate an offer. Buyers have more time to compare properties, review recent sales, and negotiate when a home does not appear to be priced appropriately.
One of the most common mistakes in a slower market is relying too heavily on older comparable sales without accounting for more recent activity. The right price needs to reflect current buyer behavior, competing inventory, condition, location, and the most recent closed and pending sales.
The good news is that sellers are still benefiting from a market where inventory remains below historical averages. But that advantage does not eliminate the need for a thoughtful pricing strategy.
What This Means for Buyers
Buyers may have slightly more negotiating leverage than they did during the most competitive periods of the market, but this is not a market where major discounts should be expected across the board.
Prices remain relatively firm, and lowball offers are unlikely to succeed on well-priced homes. Buyers who want the best opportunities should focus on properties that have been sitting longer, listings that have experienced price adjustments, or homes where the seller may have more flexibility.
The most successful buyers this fall will likely be those who understand their budget, remain prepared to act, and make offers based on current market value rather than assuming every seller is willing to accept a steep discount.
Looking Ahead
Orange County’s housing market is following its usual seasonal pattern as both supply and demand begin to ease. Mortgage rates remain the biggest wildcard heading into the next several weeks.
If rates stay near 6.75%, the Fall Market could resemble 2024, when conditions cooled modestly rather than shifting dramatically. Upcoming economic data, including employment and inflation reports, may influence mortgage rates, while changes in oil prices related to the Iran conflict could also create additional uncertainty.
For now, the market is slower than the pre-COVID norm, but it remains stable. The luxury segment is showing particular strength, while the broader market continues to reward realistic pricing, preparation, and informed decision-making.
