A Shift in Momentum
After a slow start to the year, the Orange County housing market is gaining traction with increased buyer interest and a notable drop in market time.
The Winter Season Unfolds
As buyer demand accelerates, the housing market is heating up, causing market times to shorten significantly.
Think of visiting an amusement park right as it opens: no lines, quick access to top rides, and a relaxed pace. But as the day progresses, crowds gather, and wait times surge. That’s similar to the Winter Housing Market. Early January mirrors the quiet of an empty park, with limited buyer activity and the year’s lowest housing inventory. Yet, by mid-January, the pace picks up, signaling the start of the Winter Market.
Running from mid-January to mid-March, the Winter Market bridges the slow holiday period and the bustling Spring Market. Each week sees a steady rise in inventory, a surge in buyer demand, and a sharp decline in market time.
Buyer Activity Heating Up
With holiday festivities behind, many buyers re-enter the market, boosting demand—the number of new pending sales over the past month. Historically, demand increases by around 47% during this period (2017-2019). In the last two weeks alone, demand spiked 36%, adding 352 new pending sales, totaling 1,340. This upward trend is expected to continue through February and March, peaking in spring.
Inventory Trends
While demand grows rapidly, inventory is inching up. Homes priced right, in excellent condition, and move-in ready are flying off the market, often attracting multiple offers. In the past two weeks, inventory rose by 2% (62 homes), bringing the total to 2,821. Though this is an increase from last year, it remains below pre-pandemic averages.
Market Time Takes a Dive
The Expected Market Time (how long it would take to sell all current listings at today’s pace) has plummeted from 84 to 63 days in just two weeks. This trend will likely continue, with the fastest market pace expected between March and April.
Winter's Momentum
Contrary to popular belief, winter isn’t a slow season for real estate. Buyer activity surges after the holidays, leading to increased pending sales. While more homes are listed during the Winter Market than the holidays, it doesn’t match the flood of listings seen in spring, causing inventory growth to lag behind demand.
Active Listings Update
Inventory climbed by 2% recently, totaling 2,821 homes. Turn-key properties in prime locations are selling quickly, while homes needing updates or priced too high linger longer.
Last year, inventory stood at 1,942—31% lower. Pre-COVID, the average was 4,843 homes, 72% higher than today. Despite more sellers entering the market compared to the past couple of years, many homeowners remain hesitant to move due to low locked-in mortgage rates.
Demand Snapshot
Demand soared by 36% recently, reaching 1,340 pending sales—the largest two-week jump since early 2023. Mortgage rates around 7% continue to influence buyer behavior, with demand tracking closely with 2023 and 2024 levels.
Economic indicators, like job growth and wage data, play a key role in shaping mortgage rate trends, impacting housing demand. This week’s job reports will be critical in assessing future rate shifts.
Luxury Market Insights
Orange County’s luxury sector (homes over $2.5 million) is seeing strong activity. Inventory increased by 12% (92 homes), while luxury demand jumped 44%, with 140 pending sales. The Expected Market Time for these high-end properties dropped from 228 to 178 days, reflecting growing buyer interest.
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$2.5M - $4M: Market time decreased from 149 to 132 days.
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$4M - $6M: Dropped from 272 to 183 days.
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$6M+: Fell dramatically from 595 to 333 days, meaning sellers may expect to close by early 2026.
Final Thoughts
The Orange County housing market is shaking off its early-year chill. With demand surging, inventory slowly climbing, and market times dropping, the stage is set for a dynamic Spring Market. If you’re considering buying or selling, now is the time to act while the market gains momentum.
