What’s Happening in the Orange County, Real Estate Market in 2025?

Welcome to your March 2025 update on the Orange County real estate market! Whether you’re a prospective buyer, seller, or just curious about one of Southern California’s most most dynamic housing scenes, there’s a lot to unpack. The market is showing signs of evolution shifting from the frenzied highs of recent years to a more nuanced landscape. As always, if you want a report like this for your specific city or neighborhood just simply ask and I will do one for you. Now, let’s dive into the key trends, what they mean for you, and where things might be headed.

Prices Are High, But Growth Is Slowing

Orange County has long been a premium market, and that hasn’t changed in 2025. The median home price continues to hover above the $1 million mark—a threshold it first crossed in 2022 and has since solidified. Median prices are around $1.2 million to $1.35 million for single-family homes, depending on the specific area within the county. Detached homes, in particular, are commanding top dollar.

However, the rate of price growth is tapering off. After years of double-digit year-over-year increases, 2025 projections point to more modest gains—likely in the 3% to 5% range (the last 12 months we have seen an 8.9% gain). This slowdown reflects a balancing act between persistent demand and a gradual uptick in supply, alongside broader economic factors like stabilizing interest rates. For buyers, this might mean a slightly less daunting climb, but for sellers, the days of jaw-dropping appreciation may be pausing.

Inventory Is Creeping Up

One of the biggest shifts this year is the increase in housing inventory. Active listings in Orange County are up significantly. This is a stark contrast to the ultra-tight supply that defined the market during the pandemic boom. 

What’s driving this? Homeowners who locked in low mortgage rates years ago are still hesitant to sell, but new construction and a slight uptick in move-ups or relocations are adding to the pool. For buyers, this means more options—a welcome relief in a county where bidding wars were once the norm. Sellers, though, might need to adjust expectations and ensure their properties stand out in a less frenzied market.

A Seller’s Market, But With Nuance

Despite the uptick in inventory, Orange County remains a seller’s market in early 2025. Demand is still robust, fueled by the region’s strong local economy, desirable lifestyle, and diverse industries like tech, healthcare, and tourism. Luxury homes—those priced above $2 million—are a standout, selling 15% faster than last year, particularly in areas like Irvine and Newport Coast. Cash-heavy buyers, including international investors, continue to play a role here, unbothered by mortgage rate fluctuations.

That said, the market isn’t as uniformly hot as it once was. Well-priced, move-in-ready homes still attract multiple offers, especially in spring, but properties that need work or are overpriced are sitting longer. Buyers have a bit more leverage to negotiate, particularly as pending sales show signs of picking up after a sluggish late 2024.

Market fact: There were 465 homes withdrawn, expired, or cancelled from the market in February. More times than not it is because nobody offered to buy them at the asking price. 

Interest Rates and Economic Factors

Mortgage rates are a big piece of the puzzle. As of early 2025, 30-year fixed rates have dipped below 7%—hovering around 6.5% to 6.7%—down from highs above 7.5% in 2023. This decline is sparking renewed buyer interest, though affordability remains a challenge in a county where the median sale price is nearly three times the national average. Orange County’s strong job market and low unemployment continue to buffer it from broader economic headwinds, but global factors like inflation and employment trends could still sway affordability down the line.

What’s Ahead for 2025?

Looking forward, Orange County’s real estate market seems poised for steady, if unspectacular, growth. Home values should rise modestly as supply and demand find equilibrium. Interest rates will be a wildcard—any further drops could reignite buyer enthusiasm, while stagnation might keep things balanced. The luxury segment will likely stay strong, but entry-level and mid-tier buyers might find more opportunities as inventory grows.

For buyers: Be patient, get pre-approved, and act fast on the right property—competition isn’t gone, just tempered. For sellers: Price strategically and highlight your home’s best features to stand out in a market with more choices.

Final Thoughts

Orange County’s real estate market in 2025 is a story of resilience and adaptation. It’s still one of California’s most coveted places to live, blending coastal charm with economic vitality. Whether you’re buying, selling, or watching from the sidelines, staying informed is key in this evolving landscape. What are your thoughts on the market? Drop a comment below. I’d love to hear your take!