Orange County Housing Market Update: Winter Momentum Is Building
The Orange County real estate market has moved decisively into its Winter Market phase, a period that historically signals the return of buyer activity, improving affordability, and a steady pickup in transaction volume. After the typical holiday slowdown, early-year market conditions are beginning to shift—often quietly at first—before activity accelerates into spring.
With mortgage rates now noticeably lower than they were at the beginning of 2025 and inventory growth remaining restrained, early 2026 is shaping up to be a strategically important window for both buyers and sellers. Understanding how these seasonal transitions work—and how to position yourself during them—can make a measurable difference in outcomes.
Understanding the Winter Market Cycle in Orange County
Despite changing headlines and economic uncertainty, Orange County real estate follows a remarkably consistent annual rhythm. The market transitions out of the Holiday Market and into the Winter Market around mid-January. During this phase, buyer engagement increases rapidly, while the number of new listings tends to grow at a slower pace.
This widening gap between demand and supply is what causes the market to gain momentum week by week. Early indicators often go unnoticed, but by the time competition becomes obvious, the advantage has already shifted.
Mortgage Rates and Buyer Affordability
Mortgage rates have stabilized in the mid-6% range since early fall, representing a meaningful improvement compared to where rates stood at the start of last year. This marks the longest sustained stretch of improved affordability since the Federal Reserve began tightening policy in 2022.
As borrowing costs ease, many buyers who paused their searches in prior months are re-entering the market. Historically, this renewed affordability fuels demand throughout the Winter Market and carries directly into the spring buying season.
Housing Inventory: More Choice, Still Limited Supply
Active housing inventory increased by approximately 13% in early January, reaching just over 3,000 available homes. This represents the highest mid-January inventory level in several years. Much of this rise is seasonal, as properties that were temporarily withdrawn during the holidays return to the market.
Even with this increase, overall supply remains well below pre-pandemic levels. The result is a short-lived period where buyers see improved selection, while sellers continue to benefit from long-term inventory constraints.
Buyer Demand Is Re-Accelerating
Pending sales dipped briefly at the start of January, a normal seasonal pause that occurs nearly every year. Historically, this lull does not last long. From mid-January through mid-March, buyer demand typically ramps up quickly—often faster than new listings can keep pace.
This surge usually begins subtly. By the time multiple-offer situations become widespread, the early advantage has already passed.
How Quickly Homes Are Selling
Average market time extended to just over 100 days in early January, reflecting the temporary mismatch between rising inventory and slower holiday-season demand. As buyer activity continues to build, this metric tends to compress rapidly.
When homes begin selling faster, negotiating leverage gradually shifts away from buyers and back toward sellers—a hallmark of the transition into a more competitive market.
What This Means for Buyers
For buyers, the Winter Market represents a prime entry window. Mortgage rates are lower than they were a year ago, competition is still manageable, and inventory is more favorable than it will likely be later in the spring.
Those who move early often benefit from better selection, stronger negotiating positions, and less pressure than buyers who wait until peak season.
What This Means for Sellers
Buyer demand is rising—but it has not yet peaked. As winter progresses, buyer activity tends to grow faster than available inventory. Sellers who prepare their homes early and price strategically are well positioned to take advantage of building momentum as the market heads toward spring.
Final Thoughts on the Orange County Real Estate Market
The Winter Market is officially underway. Affordability has improved, buyer interest is strengthening, and housing supply remains structurally limited. Historically, this is the phase when some of the strongest opportunities begin forming—well before competition reaches its highest levels.
If you’re thinking about buying or selling in Orange County, understanding how these trends impact your specific neighborhood and price point is essential. Strategic timing and local insight matter.
For a no-obligation consultation or a personalized home valuation, reach out directly at [email protected] and take advantage of this early-season market shift.
