If the spring market was about momentum, the summer market is starting to feel very different.
Orange County has officially entered what Steven Thomas describes as the “lull phase.” This is the time of year when summer activity starts to fade, more homes sit on the market, and sellers who priced too aggressively begin realizing that buyers aren't in as much of a rush as they were earlier in the year.
And the numbers are definitely showing it.
Active inventory jumped 7% in just two weeks, adding 323 homes to the market and bringing the total to 5,020 active listings. That's the highest level we've seen since last July and the sharpest two-week increase since January.
At the same time, homes are taking longer to sell.
Expected Market Time increased from 90 to 102 days, making this the slowest non-COVID reading since January 2019. Even with inventory climbing, we're still about 35% below the average inventory levels we saw before COVID, so there isn't an oversupply of homes. There is simply less urgency from buyers.
And that's where things get interesting.
Buyer demand dropped 6% over the past two weeks, falling from 1,558 to 1,472 pending sales. According to the report, that's the lowest mid-July reading since tracking began in 2004.
Mortgage rates are playing a major role here. With rates reaching 6.55%, affordability continues to be a challenge, and buyers are becoming more cautious about when and where they spend their money.
For sellers, this is where pricing becomes incredibly important.
64% of active listings have now been on the market for more than 30 days, while 41% have been sitting for more than 60 days.
That's a pretty clear signal that buyers are taking their time.
Even homes below $750,000 are not automatically moving quickly. About 43% of listings in that price range have been sitting for more than 60 days. And at the luxury level, the numbers are even more challenging, with more than half of homes above $2.5 million sitting for 60 days or longer.
We're also seeing more sellers decide to take their homes off the market altogether.
Between January and June, 3,669 sellers withdrew their listings, an 11% increase from last year. That's a significant number, especially when you consider that it represents about 73% of the current active inventory.
The luxury market is experiencing even more of a slowdown.
Luxury inventory increased slightly while demand dropped 9%, pushing Expected Market Time to 193 days for homes above $2.5 million. For properties above $6 million, the average is now a staggering 341 days.
At the current pace, someone listing a $2.5 million-plus property today could be looking at a pending sale around January 2027.
But here's the part I don't want sellers to overlook.
Homes are still selling.
In June, 1,994 homes closed, which was up 9% from the same month last year and up 10% from May. The average sales-to-list price ratio was an impressive 99.9%, and 99.7% of sales involved sellers with equity.
Even more telling, half of all June closings sold within the first two weeks.
That tells us something important.
The market isn't broken. Buyers are simply being selective.
When a home is priced correctly, well-presented, and in move-in condition, it can still attract attention and sell quickly.
The challenge is being on the right side of that equation.
For sellers, this is not the time to test the market with an unrealistic price and hope someone falls in love with the home. Pricing at true Fair Market Value from the beginning can make the difference between getting strong activity and watching your listing sit month after month.
For buyers, the current market offers something we haven't had as much of in recent years: time. There are more homes to choose from, less competition, and more opportunities to evaluate a property before making a decision.
As we move toward the Autumn Market, sellers who are considering a move should pay close attention to what the market is telling them now.
The summer window is still open.
But waiting too long to adjust to the market can make the road ahead much harder.
