By Eric Engelbert

Q1 2026 Update, April 2026

When I published this forecast at the start of the year, I wasn't thinking about a war in Iran. Forty days into the conflict, the economic ripple effects are real. Mortgage rates have ticked up, and the daily cost of living for American households has increased alongside broader inflationary pressure. These are meaningful headwinds, and they deserve an honest reassessment.

But here is what the Orange County market is telling us right now: not much has changed on the ground.

The Market Has Held Steady

Despite the uncertainty, Orange County buyers and sellers are moving at a completely normal spring pace. Sellers are listing. Buyers are buying. There is no sign of the kind of hesitation or pullback you might expect given the geopolitical backdrop. The fundamental truth of real estate is that people need shelter, and that truth continues to drive activity regardless of what is happening overseas or at the gas pump.

This raises the questions we are hearing most from clients right now: Will people stay put to avoid the uncertainty? Will they downsize to offset higher costs? Or will rising expenses push some buyers toward more affordable inland or out-of-state markets? The honest answer is that all three are happening, but none at a scale that is disrupting Orange County right now.

What the Numbers Are Showing

The clearest signal in the current data is in the $1,000,000 to $2,000,000 price range, which remains the strongest segment of the market. Last week, homes in this range sold for an average of approximately $2,000 over list price, a figure that doesn't sound dramatic but effectively confirms that well-priced properties in this segment are selling right at list. Days on market for these homes are low and demand remains high. If you are a seller with a property in this range and it is priced correctly, this market is working in your favor.

The luxury segment, properties priced above $2,500,000, continues to see activity but is trading at an average discount of 3 to 4 percent off list price. That is not a sign of distress; it reflects the natural dynamic of a high-end market where buyers have more leverage and transactions are more negotiation-driven. Luxury in Orange County remains resilient, just not immune to broader financial caution.

What to Watch

The Iran conflict is 40 days old. Markets can absorb short-term shocks. What matters for housing is the duration of elevated rates and cost pressure, not the event itself. If rates continue rising or costs persist, we may eventually see more buyers choosing to stay put or look toward more affordable alternatives. For now, Orange County is not showing those cracks. The spring market is functioning. Homes priced well are moving. Buyers are still showing up.

The full forecast below remains our baseline for 2026. We will continue to update it as the year unfolds.

December 12, 2025

Orange County continues to be one of the most dynamic housing markets in California. As we look toward 2026, buyers and sellers alike are asking: what can we expect? While national trends point to modest growth, Orange County’s market remains unique balancing strong demand, limited supply, and opportunities for those who know how to navigate it.

Orange County Real Estate, Inc. stands ready to help clients source properties and negotiate the purchase or sale of all types of real estate, ensuring the best possible outcomes in any market.

Current Market Overview

By the end of 2025, Orange County has demonstrated remarkable resilience. Total home sales are projected to reach just under 18,000, maintaining steady growth over the past four years. While inventory is rising slowly, serious buyers remain active, keeping the market competitive.

Mortgage rates have remained below 6.64% for many weeks, giving buyers more room to act. Looking ahead to 2026, rates are projected to average around 6%, which could improve affordability and stimulate activity among buyers who have been waiting for the right time to enter the market.

The Impact of Canadian Buyers

One factor affecting U.S. real estate markets in 2025 has been the decline in Canadian buyers. Canadian searches for U.S. homes dropped roughly 26% year-over-year, with the biggest decreases in popular vacation-home and coastal markets such as Florida, Arizona, and California. Historically, Canadians accounted for about 13–14% of foreign buyers in the U.S., purchasing billions in second homes and vacation properties.

The decline in Canadian demand affects markets that relied on second-home buyers or seasonal buyers. While Orange County still sees strong domestic demand, the pullback of Canadian buyers could slightly reduce competition for coastal and luxury properties.

That said it’s important to note that international interest hasn’t vanished altogether. For 2024–2025, foreign buyers invested roughly $56 billion in U.S. residential real estate. 

In the state of California which remains a top destination about 57% of international buyers came from Asia during that period. 

Buyers from China lead that group, many make all‑cash purchases, often in higher‑end or investment properties. 

So while Canadian and seasonal “snowbird” demand may be weaker, Asian and other foreign investors continue to exert influence especially in coastal and coastal‑adjacent markets like Orange County.

U.S. Snowbird and Migration Trends

In addition to Canadian buyers, domestic “snowbirds” and northern-state movers have also pulled back in recent years. Historically, retirees and seasonal buyers from the Northeast and Midwest moved to Sunbelt states Florida, Arizona, and southern California to escape cold winters. Over the past two years, this migration has slowed significantly:

  • Many U.S. residents from northern states stayed put rather than move south, contributing to relatively tight inventory in their home markets.
  • Migration data shows only about 11% of Americans changed residences in 2024, the lowest rate since mid-20th century records began.
  • Sunbelt markets that typically attracted seasonal or retirement buyers have seen a slower influx, resulting in longer listing times, increased price adjustments, and modest cooling in some vacation-home segments.
  • Northern and interior markets have experienced less turnover, as fewer people left for warmer climates, which in turn has helped maintain inventory stability in those regions.

The slowdown in both international snowbirds (Canadian buyers) and domestic seasonal migration affects market dynamics nationally. For Orange County, it means the market will be more dependent on local and domestic buyers rather than seasonal or foreign buyers, creating a more stable and predictable environment for 2026.

Is It a Buyer’s Market in 2026?

A true buyer’s market occurs when there are more homes for sale than buyers, giving buyers leverage in negotiations. In Orange County, inventory is expected to rise modestly in 2026, but demand remains strong.

Key points for buyers in 2026:

  • Homes are likely to stay on the market slightly longer than in 2025, but not enough to create a classic buyer’s market.
  • Properties listed for longer periods, especially those over 90 days, may offer negotiation opportunities.
  • Coastal and luxury markets will remain competitive due to limited supply.

In comparison to other parts of the country particularly the Sun Belt, where inventory surges have created strong buyer’s markets Orange County remains balanced, with opportunities for both buyers and sellers.

Is It a Good Time to Sell?

Spring and early summer 2026 will continue to be prime selling months, as buyers actively search for homes before the next seasonal slowdown.

Tips for sellers:

  • Smart Pricing: Avoid overpricing. Homes priced correctly based on comparable sales are more likely to sell quickly.
  • Maximum Exposure: Utilize professional photos, detailed listings, social media campaigns, and major portals. Our website has over 1,000,000 monthly impressions for Orange County alone, which improves visibility and distribution for your property.
  • Marketing Strategy: Geo-targeted online ads, neighborhood group shares, and community exposure can help your listing stand out.

Even with slightly longer days on market projected, sellers who follow these strategies can still achieve strong results.

Pricing Strategies for 2026

  • Pricing at Market Value: Aligns with buyer expectations and recent sales; likely the safest approach.
  • Below Market Value: Can drive multiple offers, but only if buyer demand remains strong.
  • Above Market Value: Risky in a market with modest growth; may lead to longer listing times and eventual price reductions.

Orange County Real Estate, Inc. can guide sellers in choosing the right pricing strategy based on local data, current buyer behavior and your personal goals.

Opportunities for Buyers

  • More Choice: Rising inventory in 2026 provides more options, particularly for buyers seeking move-in-ready homes.
  • Mortgage Options: Buyers may benefit from rate buydowns or long-term fixed rates if planning to stay in their home for many years.
  • Negotiation: Homes that have been on the market for longer periods may allow room for offers below list price.

Orange County Market Trends

Total Sales: After 17,675 sales in 2024 and nearly 17,600 sales by October 2025, 2026 is expected to see continued steady activity.

  • Inventory: Still tight but slowly increasing, especially in non-luxury and suburban markets.
  • Mortgage Rates: Projected around 6%, helping buyers act without overextending financially.
  • Price Growth: Modest, likely 1–2.5% in Orange County slower than past years but steady.

Orange County remains a market where informed buyers and sellers can succeed. 2026 is likely to offer:

  • Moderate price growth
  • Slightly longer days on market for some listings
  • Opportunities for negotiation, especially on older or longer-listed properties
  • Competitive activity in coastal and luxury segments

The decline in Canadian buyers, combined with slower U.S. snowbird migration, is shaping the market, but strong domestic demand and strategic guidance can help buyers and sellers navigate the landscape successfully.

Partnering with Orange County Real Estate, Inc. ensures access to local insights, expert negotiation, and a smooth transaction whether buying or selling.

For 2026, preparation and strategy are key. Staying informed about trends, pricing wisely, and leveraging expert guidance will help you make the most of this balanced market.