Then and Now: Why 2026 Is Not Another 2008 for Orange County Housing

The market has clearly slowed and rates are up, so I understand why so many people ask me if a crash like the Great Recession is coming. Steven Thomas at Reports on Housing built his newest report around that exact worry, and the numbers simply do not support it. This is a slower market, not a fragile one, and the difference matters a great deal.

There are 4,952 homes actively for sale today, up just 13 over the past two weeks. That is down about 8 percent from a year ago, when we had 376 more homes on the market. It is also well under the pre COVID norm from 2017 to 2019, which averaged 6,400 homes, roughly 29 percent more than today. A county drowning in unsold homes is what a crash looks like, and that is the opposite of where we are.

Demand, measured as new pending sales over the past month, came in at 1,349, down 119 over two weeks and about 19 percent below a year ago. It is the quietest September for demand since 2007, and higher rates are the main reason buyers are being patient. Even so, homes are going into escrow across Orange County every single day.

The overall Expected Market Time, the number of days it would take to sell every listing at the current pace, is 110 days, up 9 days recently and slower than the 85 days we saw a year ago. Underneath that, single family detached homes are quicker at 99 days, while condos and townhomes sit at 128 days, up from 87 last year. The luxury market takes the most patience, with an overall luxury Expected Market Time of 184 days.

Here is the heart of why this is not 2008. Back then, risky loans, tiny down payments, and weak credit set up a wave of forced sales. Today the lending is far stricter, down payments and credit scores are much higher, and those risky loan products are gone. In all of 2025 and 2026 combined, the county has seen only 66 distressed closings. In 2009 there were 13,008. Right now there are just 13 distressed homes on the market, about 0.3 percent of everything for sale.

That solid footing is exactly why values are holding. The sales to list price ratio is 99.5 percent, so well priced homes are still selling for essentially full asking. About 99.72 percent of recent sales came from owners with equity, and August produced 1,755 closed sales. Orange County homeowners are in a strong financial position, not a distressed one.

Put simply, this is a slower, more balanced market with a healthy foundation underneath it, not a market on the edge of a cliff. Buyers have more room to negotiate and sellers who price to real comparable sales are still winning. If you want to know what these numbers mean for your home or your next move, call or text me anytime at 657.340.0418 and we will build a plan around your timeline.