The Housing Market Is Stronger Than You Think

Why crash fear doesn't match what we see in Costa Mesa and Newport Beach

The crash talk is back. High rates, tight budgets, headlines built to scare you off a move. We hear it from clients every week. The local data tells a calmer story.

This was never going to be 2021 again. Those years, with sub-3% rates and ten offers on every listing, were the anomaly. Comparing anything to that peak makes today look grim. Held up against almost any normal market, the coast is in solid shape. Just not in the way the national headlines describe.

The equity picture is the whole ballgame

Here's the number that matters most. In 2008, homeowner equity and mortgage debt across the country were nearly even. When trouble hit, millions of owners had no cushion. That is what turned a downturn into a collapse.

Today the gap is enormous. National homeowner equity sits around $35 trillion, more than double total mortgage debt, according to Federal Reserve data.

On the coast, that cushion runs deeper than the national average. Most Orange County owners hold somewhere between 30 and 50 percent equity in their homes. A lot of long-tenured Costa Mesa and Newport Beach owners are well past that. When your home is worth two or three times what you owe, a rough patch is an inconvenience, not a foreclosure.

Nobody's losing their home on the coast

You can see that strength in the foreclosure numbers. Countywide, Orange County has fewer than 200 properties in some stage of foreclosure and a handful of bank-owned homes. In a county with more than 790,000 residential properties, that is close to a rounding error.

Foreclosure activity has ticked up nationally over the past year, but it remains far below historical norms. On the coast, distress is not the story. Equity is.

The lock-in effect keeps a lid on supply

There's a second reason this market holds firm. More than half of all active mortgages in the country still carry a rate under 4%, per the FHFA.

Those owners are in no hurry to trade a 3% loan for something near 6.5%. That reluctance keeps inventory tight, especially in built-out coastal neighborhoods where there was never much room to build in the first place. Fewer listings, steadier prices, less drama. It also means the sellers who do come to market this year face less competition than the crash chatter would suggest.

Now the part the national story gets wrong locally

Here's where we part ways with the "prices are still rising" headline. Nationally, prices are up around 2% year over year. On the coast, the picture is more layered, and pretending otherwise doesn't help anyone.

Costa Mesa's citywide median has been running down high single digits year over year in recent months, even as the sub-$1.5M end of the market stays genuinely competitive. Homes there are still selling in about a month, often with multiple offers. Newport Beach is softer at the top. Above $3M, active listings are priced well above what buyers are actually paying, and days on market have stretched out.

None of that is a crash. It's a reset after years of overheating, and it's uneven by price point. In our experience, that split is the single most important thing to understand before you make a move here. The rules on the Eastside Costa Mesa market under $1.5M are not the rules in Newport Coast above $5M.

What this means for your next move

If you own on the coast, you are not fragile. You have equity, options, and time. That's a position of strength, whether you stay put or make a move.

If you're buying, the softer luxury segment is quietly handing you negotiating room that didn't exist two years ago. If you're selling in the competitive lower tiers, accurate pricing still gets you multiple offers. The strategy just depends entirely on where your home sits in that split.

Waiting for a 2008-style collapse that the numbers don't support has a real cost. Every month on the sidelines is a month someone else is building equity or locking in a price.

If you want an honest read on where your specific home falls in all this, we'd love to talk. No pressure, no pitch. Just a straight answer about your situation.

Bernice DeVries | Broker | Kastell Real Estate Group — Costa Mesa & Newport Beach