**What’s happening in the Orange County real estate market this month?**

Inventory is down, demand is climbing, mortgage rates are shifting, and foreclosures remain minimal. The key drivers to watch right now are jobs and interest rates.

Why Foreclosures Aren’t Today’s Story

Headlines often speculate about a foreclosure wave, but the data paints a different picture.

• 2008: More than 5,600 distressed homes on the market in Orange County.
• Today: Just 8 distressed listings, representing 0.2% of total inventory.

Thanks to stronger lending standards, high homeowner equity, and the prevalence of fixed-rate mortgages, homeowners are more financially stable than ever. Even a small increase in distressed sales would represent a normalization, not a crisis.

Jobs and the Economy

The jobs market is softening: private payrolls recently posted a rare decline, prior months were revised downward, and unemployment has ticked higher.

Why it matters for housing:
• Jobs drive consumer confidence and homebuying decisions.
• A cooler labor market can pressure mortgage rates lower—unless inflation forces the Fed to hold them higher for longer.

Mortgage Rates

Rates fell below 6.5% in September and have held steady for over three weeks, already pulling more buyers back into the market.

• If inflation continues to ease, rates could drift closer to 6%, improving affordability and fueling demand.
• If inflation surprises higher, rates may stall at current levels.

Inventory

Active inventory dropped 4% in the past two weeks to 4,576 homes—the steepest decline this year. Seasonal slowdowns will likely push inventory even lower through year-end as fewer new listings come on and more unsold homes withdraw.

Demand

Pending sales rose 1% to 1,609—the highest since March. The recent dip in rates has been a major factor, and further declines could push demand even higher despite tighter supply.

Expected Market Time

With fewer homes available and demand rising, Expected Market Time fell from 90 to 85 days. That’s faster than summer but slower than last year, and very much in line with pre-COVID averages.

What This Means

For Sellers

• Lower inventory = less competition.
• Motivated buyers are still writing offers.
• Well-priced, well-marketed homes are moving.

Tip: Price competitively, invest in presentation, and leverage global marketing channels to maximize exposure.

Request a Complimentary Home Valuation

For Buyers

• A softer labor market increases the chance of lower mortgage rates ahead.
• Lower rates could mean more competition in the coming months.

Tip: Complete your home search with Tim Smith Real Estate Group, secure full underwriting, shorten contingencies where possible, and act before the market grows more competitive. 

Bottom Line

Orange County’s housing market is steady and resilient. Homeowners are financially stronger than ever, distressed sales remain minimal, and the real story this fall is how jobs and mortgage rates shape demand in the face of declining inventory.

For a tailored strategy—whether buying or selling—connect with Tim Smith Real Estate Group, California’s #1 Coldwell Banker team.

This update is for general information only and not legal, tax, accounting, or financial advice. For guidance specific to your situation, consult licensed professionals. We uphold the Fair Housing Act, RESPA, NAR Code of Ethics, and state advertising rules; no steering or commission-fixing.