Orange County's Price Decline Continues Into Second Month
Orange County's housing market continues to experience a notable shift in pricing dynamics. May 2025 saw the median single-family home selling for $1,419,500, representing a 0.21% decrease compared to May 2024's $1,422,500. While this decline is smaller than April's 1.57% year-over-year drop, it marks the second consecutive month of negative price growth - a significant departure from the consistent appreciation we witnessed throughout 2024 and early 2025. The median price also showed a slight month-over-month increase of 0.14% from April's $1,417,450, suggesting that while year-over-year comparisons remain challenging, there may be some stabilization occurring at current price levels.
Inventory Explosion Reaches New Heights as Market Floods With Options
The Orange County housing market continues to be dominated by an unprecedented surge in available inventory. The latest data for May 2025 shows 4,457 single-family homes on the market, maintaining the staggering 79.28% increase compared to May 2024. This represents a continued month-over-month growth of 15.98% from April's 3,843 homes, demonstrating that the inventory buildup shows no signs of slowing down. This dramatic increase in available properties has fundamentally altered the market landscape, providing buyers with an abundance of choices and significantly shifting the balance of power in negotiations. The sustained inventory growth throughout the spring selling season indicates that supply is far outpacing demand in the current market environment.
Buyers Take Their Time as Market Pace Continues to Slow
With the massive influx of inventory, buyers are clearly capitalizing on their improved position by taking more time with their purchasing decisions. The median single-family home in Orange County now sits on the market for 23 days before selling, representing a substantial 35.29% increase from May 2024's 17 days. This also reflects a 4.55% month-over-month increase from April's 22-day average, indicating that the trend toward longer selling times is accelerating rather than stabilizing. This extended timeline gives buyers the luxury of being highly selective and methodical in their home search process, a stark contrast to the rapid-fire market conditions that characterized previous years when multiple offers and quick decisions were the norm.
Orange County Shifts Toward a Buyers' Market
When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a sellers' market, whereas markets with more than three months of MSI are considered buyers' markets.
With 3.3 months of supply inventory in May 2025, Orange County has now crossed into buyers' market territory for the first time in recent memory. This represents a 6.45% month-over-month increase from April's 3.1 months and a dramatic 65% year-over-year increase from May 2024's 2.0 months of supply. The sustained growth in inventory levels, combined with the corresponding decline in pricing power, clearly indicates that buyers now hold the advantage in negotiations. This shift represents a fundamental change in market dynamics that sellers need to acknowledge as they adjust their expectations for both pricing and timeline in the current environment.
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Regan Beegle | Co-Founder/Broker | LIC #01736778 
George Hanold V | Co-Founder | LIC #01446306
