What Buyers and Sellers Need to Know Right Now.
The Southern California housing market in 2026 feels very different from the fast-paced, unpredictable years we experienced after the pandemic. Instead of bidding wars on nearly every property and double-digit appreciation, the market is settling into a more stable and realistic environment.
This doesn’t mean the market is weak—it simply means we’re moving into a more balanced phase where strategy, timing, and pricing matter more than ever.
Where prices stand today
Home values across Southern California remain historically high, even though appreciation has slowed. As of late 2025, the statewide median home price was around $850,680, with Southern California sitting slightly higher at about $855,000.
In Orange County, prices remain significantly higher than the state average. By December 2025, the median home price was about $1.16M–$1.2M, showing modest year-over-year growth of around 2%.
As of early 2026, the average home value in Orange County is about $1.14M, reflecting a slight dip of about 0.2% over the past year.
Median listing prices in the county at the start of 2026 are hovering around $1.35M, which shows just how strong pricing remains in desirable coastal and central neighborhoods.
In short, prices haven’t crashed—they’ve simply stabilized after years of rapid growth.
Interest rates and buyer activity
Mortgage rates are one of the biggest factors shaping today’s market. As of February 2026, the average long-term mortgage rate is sitting just above 6%, a noticeable improvement compared to the peaks we saw in recent years.
Lower rates are helping affordability slightly, but many buyers are still cautious. Nationally, home sales have slowed despite improved affordability, largely because inventory remains limited and prices are still high.
This has created a market where:
Buyers have more negotiating power than before
Sellers must price homes correctly to attract serious offers
Deals are happening, but with more thought and strategy on both sides
What buyers are experiencing
For buyers, the market is no longer the intense, ultra-competitive environment of 2021 and early 2022. Homes are taking a bit longer to sell, and price growth has slowed significantly.
In Orange County, for example, homes are now taking around 55 days on average to sell, compared to faster timelines in previous years.
This shift means buyers are starting to see:
Fewer bidding wars
More opportunities to negotiate
Slightly better affordability compared to the recent past
Many forecasts also expect home prices to grow slowly in 2026, with most predictions calling for 1% to 2% appreciation instead of the double-digit gains of previous years.
What sellers should expect
Sellers still hold an advantage in many parts of Southern California, especially in desirable neighborhoods like those across Orange County. Inventory remains tight by historical standards, and well-priced homes are still attracting strong interest.
However, the market is more selective. Some homes—especially those priced too aggressively—are seeing reductions. By late 2025, nearly 1 in 5 new homes nationwide had price cuts, showing that buyers are paying closer attention to value.
The takeaway for sellers is simple:
Today’s market rewards proper pricing, strong presentation, and strategic marketing. Homes that check those boxes are still selling at excellent prices.
The bigger picture: a market reset
After several years of extreme conditions, most economists agree that the housing market is entering a “reset” phase. Price growth is slowing, inventory is gradually improving, and buyers and sellers are meeting more in the middle.
In California, this shift means:
Slower, more sustainable price growth
Gradual improvement in affordability
More balanced negotiations between buyers and sellers
This is often the healthiest type of market because it creates opportunities for both sides.
The outlook for the rest of 2026
Most projections for 2026 call for:
Mortgage rates hovering around the low-6% range
Modest home price appreciation of about 1%–2%
Gradual increases in buyer activity as affordability improves
Rather than a dramatic boom or crash, 2026 is shaping up to be a steady, opportunity-driven market.
Final thoughts
The Southern California market today isn’t about timing the peak or waiting for a crash. It’s about understanding your position and making the right move based on your goals.
Buyers now have more options and negotiating power than they’ve seen in years. Sellers still benefit from strong prices, especially when their home is marketed and priced correctly.
In a balanced market like this, the right strategy can make all the difference.
Thinking about buying or selling in 2026?
If you’d like a custom home value report or a personalized plan based on your goals, feel free to reach out anytime.
JPHHOMES. Client Focused. Results Driven.
