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With home sales slowing, one question keeps coming up: is the Orange County housing market headed for another crash like 2008? It is a fair question. During the Great Recession, home values plunged, foreclosures soared and homes flooded the market.
So I took a close look at what’s happening in the Orange County housing market today. Here’s what the numbers show.
Distressed Sales Are Almost Nonexistent
There are only 13 distressed homes on the market in all of Orange County: six foreclosures and seven short sales. Combined, they make up just 0.3% of all listings and 0.5% of buyer demand. A year ago, there were 12.
Closed sales tell the same story. In August, foreclosures accounted for only 0.17% of all closed sales and short sales for 0.11%. That means 99.72% of all sales were sellers with equity.
Homeowners with equity have options. Nothing forces them to sell at any price, and that is a very different picture from 2008.
Orange County Housing Market Inventory Is Still Below Normal
There are 4,952 homes for sale in Orange County, nearly unchanged over the past two weeks (up 13 homes). That is 376 more than a year ago, when 4,576 homes were on the market. But it is still far below the pre-COVID average (2017 to 2019) of 6,400 homes, which was 29% higher than today.
From January through August, 27% fewer homes came on the market than the pre-COVID average, 8,010 fewer listings. There is no flood of homes. Supply is still limited.
Demand Has Cooled in the Orange County Housing Market
Buyer demand, which I track through pending sales over the past month, dropped by 119 in two weeks to 1,349, down 8%. That is the largest drop of the year and the lowest September reading since 2007. A year ago, there were 1,609 pending sales, 19% more than today. The pre-COVID average was 2,262, 68% higher than now.
Slower demand is real. But a slow market and a crash are two very different things.
Homes Are Taking Longer to Sell
At today’s pace of buying, it would take 110 days to sell every home on the market in Orange County, up from 101 days two weeks ago. Last year it was 85 days, and the pre-COVID average was 86 days.
In the luxury ranges, that timeline stretched even more over the past two weeks:
- $2.5 million to $4 million: 121 days, up from 106 days
- $4 million to $6 million: 218 days, up from 195 days
- Above $6 million: 454 days, up from 345 days
Homes Are Still Selling Close to Asking
There were 1,755 closed resales in Orange County in August, down 6% from 1,875 in August 2025 and down 9% from July. Even so, Orange County’s sales-to-list price ratio was 99.5%. Sellers who price right are still getting close to their asking price.
What This Means for Sellers
You’re not selling into a collapse, but you are selling into a slower market with fewer buyers and homes taking longer to sell. Pricing it right from day one and presenting your home at its best are what get it sold. If you’ve been thinking about selling, now is the time to get your strategy in place before more competition hits the market.
What This Means for Buyers
Waiting for 2008-style prices could mean waiting for something today’s numbers don’t point to. Right now, you have more homes to choose from than last year, fewer buyers competing with you and more time to negotiate. That is an opportunity worth acting on.
Let’s Talk About Your Plan
Headlines can make the market feel scarier than it is. If you want to know what the Orange County housing market means for your home or your search in South Orange County, reach out. I’ll walk you through it.
Donna Brown | Realtor® | DRE #02228536 | Keller Williams OC Luxury Realty | 949-491-2446