Orange County Housing Market Update – May 2025

What Rising Inventory Means for Home Prices in Orange County Cities Like Aliso Viejo, Irvine, and Beyond

The national news may be talking about a housing shift, but here in Orange County, the real estate “weather” has its own microclimate.

Think of it this way: just because it’s raining in Florida doesn’t mean you need an umbrella in Laguna Niguel.

In May 2025, the Orange County housing market is experiencing some significant changes—particularly in inventory levels—but the impact on home prices varies widely from city to city.

Inventory Is Climbing—But What Does That Mean?

Nationwide, housing inventory is up roughly 30% year-over-year, but because we’ve been dealing with record-low inventory levels since the pandemic, most experts believe it’ll take another year for the national market to return to pre-COVID supply.

Orange County is a different story.

Here, inventory is up 64% compared to this time last year. At this pace, our local market may hit pre-COVID inventory levels sometime in 2025. With home sales down 5–6%, the gap between supply and demand is beginning to narrow—pushing us toward a more balanced market after years of favoring sellers.

But not every city is changing at the same pace.

Aliso Viejo Still Lagging in Inventory

In Aliso Viejo, housing inventory remains well below historic norms. Even with growth, it could still be a few years before we reach 2019 levels. Homes here—especially those priced under the county’s median list price of $1.5M—are still seeing healthy buyer demand.

Irvine’s Market Is Shifting Fast

By contrast, Irvine is experiencing one of the biggest inventory surges in the region. Listings are up 185% year-over-year. This once ultra-competitive market is on track to return to 2019 inventory levels by summer 2025.

Are Home Prices Falling in Orange County?

Despite the inventory spike, home prices remain relatively stable. Nationally, prices are up 1–2% over last year.

That trend holds true in Aliso Viejo, and even in fast-changing Irvine, prices have risen 2–3% year-over-year.

This suggests that rising inventory hasn’t yet tipped the market in favor of buyers—especially in more affordable areas where demand remains strong.

What to Expect in the Months Ahead

Here’s our Orange County housing market outlook for the rest of 2025:

Prices are likely to remain steady as long as inventory stays at or below pre-COVID levels.
Higher-priced markets—like Dana Point, Laguna Beach, and Newport Beach, where average prices range from $2M to $5M+—may see homes sitting longer on the market.
Suburban cities with more attainable price points, such as Mission Viejo, Foothill Ranch, and Aliso Viejo, will likely continue to perform well due to strong buyer demand.

Final Thoughts: Real Estate Is Hyperlocal

If you’re a homeowner wondering whether now is the right time to sell, or a buyer trying to make sense of changing market conditions, the best next step is a customized market analysis. The trends in your neighborhood—or even your street—may look very different from the countywide data.

The Veronica Encinas Team specializes in helping Orange County buyers and sellers navigate local market shifts with confidence.

📞 Contact us today to get a personalized breakdown of your city’s market and what your next move should be.