Real Estate Market Update: North Orange County, California
- innapeshkova
- Feb 25
- 3 min read
Updated: Mar 8
I've been hearing a lot of not-so-great news about the real estate market lately. One of my clients even sent me a note expressing doubts about selling her house this year, because she saw a headline forecasting another 2008-style housing crisis in the US for 2025. I spent some time with her to understand her concerns, which prompted me to write this article.
There's no doubt about it - market indicators across the nation show a slower start to the real estate season. However, it's important to understand that local real estate markets can be very different from national trends, and that's exactly the case here in Brea and in the greater North Orange County, California area.
As of February 2025, the real estate landscape in North OC presents a dynamic interplay of local and national market forces. While the national housing market exhibits signs of moderation, North Orange County continues to experience robust growth, driven by unique regional factors.
National Real Estate Market Overview
In late 2024, the national housing market saw home prices rise by 3.9% annually in December, slightly up from November's 3.7%. However, forecasts for 2025 suggest a deceleration in price growth. Zillow, for instance, has adjusted its home-value growth projection for 2025 from 2.9% to 0.9%. This anticipated slowdown is attributed to increased housing inventory and higher mortgage rates, which averaged 6.85% in January 2025. These factors have tempered buyer demand, leading to a 4.9% decline in existing-home sales during the same period.
North Orange County Market Dynamics
Contrasting the national trend, North Orange County's real estate market remains vibrant. In January 2025, the median home price reached $1.2 million, marking a 12.4% year-over-year increase. Homes typically remained on the market for 55 days, slightly longer than the 44 days observed the previous year, indicating sustained buyer interest despite extended selling times.
The region's inventory levels have seen modest growth, with 1,303 homes sold in January 2025, up from 1,212 in January 2024. This increase in available properties offers buyers more options, yet demand continues to outpace supply, contributing to upward pressure on home prices.
Factors Influencing the Local Market
Several elements contribute to North Orange County's resilient real estate performance:
Economic Stability
The area benefits from a diverse economy, with strong employment sectors in technology, healthcare, and education, attracting a steady influx of professionals seeking housing.
Desirable Lifestyle
Proximity to beaches, reputable schools, and a variety of cultural amenities make North Orange County an attractive destination for families and individuals alike.
Limited Land Availability
Geographical constraints and stringent zoning laws limit new construction, ensuring that demand consistently exceeds supply.
Looking Ahead
While national forecasts predict a cooling in the housing market, North Orange County is poised to maintain its growth trajectory. Potential buyers should be prepared for competitive conditions, and sellers can anticipate favorable market dynamics. However, it's essential to monitor factors such as mortgage rate fluctuations and broader economic shifts, which could influence local market trends.
And that's ultimately where I landed with my concerned seller - after reviewing the data, she now understands that North Orange County's real estate market (as of February 2025) showcases resilience and growth, standing in contrast to the national trends she's been reading about. This divergence underscores the importance of localized market analysis for both buyers and sellers navigating the real estate landscape. With my professional experience in both the Northern California AND Southern California markets, you are well-poised with me by your side. (One thing about me - I grew up in Northern California, and maintain strong network connections by visiting family, friends, and business partners there often. I chose Southern California for my personal and professional home base, and appreciate California for all of its wonderfully unique areas.)
Ultimately, the bottom line is this - make sure you work with a Realtor who understands local market nuances and knows how to keep things in perspective - it can make all the difference to the success of your real estate transaction.
Sources:
1. Barron's: https://www.barrons.com/articles/home-prices-kept-rising-end-of-2024-what-could-cause-slowdown-f1db370a
2. Business Insider: https://www.businessinsider.com/return-to-office-wfh-commercial-real-estate-market-price-outlook-2025-2
Comments