As we kick off February 2026 on this Monday morning, Orange County's housing market is showing clear signs of a pivotal shift. Lower mortgage rates around 6-6.5%, a 13% inventory jump in January, and reawakening buyer demand are creating a rare buyer's window—especially here in Mission Viejo and across the county.[1][2]
Sales Surge in Attached Homes, Steady Demand for Detached
One of the standout trends right now is the robust increase in sales activity, particularly for attached homes like condos and townhomes. Year-over-year, sales of these properties leaped 41.4%, signaling strong appeal for more affordable options in a high-cost area like Orange County.[1] Buyers are drawn to these units in neighborhoods from Irvine to Laguna Niguel, where they offer easier entry amid ongoing affordability challenges.
Detached single-family homes tell a steadier story, with a 1.6% sales increase year-over-year. Demand remains solid for that classic Orange County dream—a yard, privacy, and proximity to beaches or top schools. In Mission Viejo, for instance, homes in Lake Forest or Aliso Viejo continue to attract families prioritizing community vibes and Saddleback College access. This consistent interest underscores why detached properties hold value, even as the market adjusts.[1]
Prices Dip, But Stability Looms
Median sales prices reflect a cooling from recent highs. Detached homes clocked in at $1,400,000, down 5.7% from last year, while attached homes followed a similar softening trend.[1] Southern California-wide, home values hit $854,993 in December—the lowest since March 2024—hinting at broader regional pressure that touches Orange County.[4]
Don't mistake this for a crash. It's stabilization after years of frenzy. More mid-range listings are entering the mix, giving buyers negotiating power without derailing long-term appreciation. My forecast for 2026? Modest price growth, maybe 2-4%, as supply balances out. In prime spots like Mission Viejo's gated communities, values could outperform thanks to low turnover and lifestyle perks.[1]
Inventory Rises, Days on Market Stretch—Buyers Gain Leverage
Inventory climbed 13% in mid-January, the highest since 2020, though still below pre-pandemic norms (we're at levels far short of the typical 4,600 homes).[2] Both attached and detached homes now average 41 days on market, up 29.2% year-over-year.[1] Expected market time hit 101 days early this month, the slowest mid-January since 2019.[2]
This is seasonal magic at work: Holiday holdouts relist, but buyer returns outpace supply growth. By mid-March, demand historically surges 70%, shrinking market time sharply—like last year's 22-day drop.[2] For Mission Viejo sellers, this means prepping now for spring momentum. Buyers? Strike while selection is up and competition light.
Lower Rates Fuel the Fire
Mortgage rates dipping to 6-6.5%—a full point below last year's peaks—are the game-changer.[2] This affordability boost pulls sidelined buyers back, especially first-timers eyeing townhomes in Dana Point or families upsizing in Yorba Linda. It's why Q1 feels electric: Winter market underway, demand building fast.[2]
In my daily showings around Orange County, I'm seeing it firsthand. Clients who waited out higher rates are now qualifying for more house, unlocking options in Mission Viejo's rolling hills or Newport Beach coastal enclaves.
Development and Infrastructure Boosting Appeal
Beyond stats, local developments are supercharging demand. New multifamily projects in Irvine's Great Park neighborhood add inventory without flooding single-family stock, easing pressure on detached homes.[1] Infrastructure wins, like the OC Streetcar extension progress, promise better connectivity from LAX to coastal hotspots, lifting values in eastern Orange County areas like Tustin and Irvine.
Mission Viejo benefits directly: Upgrades to the Oso Parkway corridor improve traffic flow, making commutes to Irvine tech hubs quicker. These enhancements draw remote workers and growing families, sustaining demand even as inventory ticks up.
Affordability Edge for Savvy Buyers
Affordability is the big win here. With prices softening and rates friendlier, monthly payments on a $1.2 million detached home drop noticeably versus 2025. Attached homes amplify this—perfect for empty-nesters downsizing from larger Mission Viejo estates or young professionals entering via Huntington Beach condos.[1][2]
Yet challenges linger: Inventory lags historic levels, and prime detached homes in beach-close zip codes move quickest. Economic stability and job growth in OC's biotech and tourism sectors support steady demand, but watch new construction pace—it's slow but could tip balances further.[1]
Advice Straight from the Front Lines
For Buyers: This is your launch window. More choices, lighter competition, better rates—act before March demand explodes. In Mission Viejo, target properties under contract quickly, but inspect for value adds like solar-ready roofs amid rising energy costs.
For Sellers: Demand builds, not peaks. Price realistically, stage sharply, and list soon to catch early momentum. I've closed deals this month where prepped homes netted 2-3% over ask despite the dip.
Orange County's market is tipping toward buyers without abandoning sellers. Stabilizing prices, growing inventory, and favorable rates make 2026 promising. From Mission Viejo's serene lakes to countywide vibrancy, now's the time to position yourself.
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