The Orange County housing market is currently in a unique "compressed window." With inventory at its lowest point in years and buyer demand beginning to wake up, February 2026 offers a strategic moment to act before the traditional spring rush accelerates competition and pricing.
1. Inventory: A Historical Shortage
Supply is currently the biggest driver of market conditions. We are seeing a steady erosion of available homes that is outpacing typical seasonal patterns.
• Active Listings: Only 2,344 homes are currently on the market across the county.
• The Trend: This represents an 18% drop year-over-year and a 12% drop month-over-month.
• The Low Point: This is the lowest level of active inventory since April 2023.
2. Demand: Buyers are Re-engaging Early
While pending sales are down 13% from December due to the holiday pause, the last two weeks have shown a notable shift.
• Rising Momentum: Demand has increased by 2% in just the last 14 days.
• Early Signals: Motivated buyers are returning to the market earlier than expected, signaling that spring momentum is already building.
3. Pricing & Mortgage Rates
Home values remain resilient despite shifting interest rates.
• Steady Values: While the rapid appreciation of 2021-2022 has slowed, median home prices remain firm across most OC cities.
• Rate Context: After holding below 6.5% in the fall, mortgage rates have edged slightly higher. However, they remain significantly lower than the 7.5% highs seen in early 2024, providing a compelling window for rate-conscious buyers.
4. The Luxury Snapshot ($2M+)
The high-end market is tightening, particularly in coastal enclaves.
• Market Pace: The expected market time for luxury properties is 154 days, which represents a balanced pace.
• Coastal Heat: Areas like Laguna Beach and Monarch Beach in Dana Point are already trending back toward conditions that favor sellers.
• Luxury Stats: Inventory in this tier is down 9%, while demand has ticked up 5% in the last two weeks.
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Strategic Takeaways
• For Sellers: Now is the time to prep and stage. With supply so low, you can achieve maximum exposure before the market becomes crowded with other listings in the spring.
• For Buyers: Acting now allows you to get ahead of the spring competition and potential price acceleration
About the Author
Leilani Serrao-Baker
Dana Point Real Estate Professional
Leilani Serrao-Baker
28202 Cabot Rd Ste 300
Laguna Niguel, CA 92677
(949) 444-9175
https://civitasrealtyca.com
