Why Is Housing in Orange County, CA So Expensive?
OC real estate has always been pricey but as the Coronavirus pandemic took the world by storm in 2020, housing costs in Orange County, CA skyrocketed.
In April 2022, the OC Register noted that median home prices in OC crossed the $1 million mark. With the high barriers to entry for first-time homebuyers, rents also shot through the roof.
Many OC individuals and families were faced with a housing dilemma: competition for homes was at an all-time high and renters struggled to find affordable apartments with vacancies.
If you visit the r/orangecounty subreddit, you’ll regularly see posts like these:
Why is Orange County, CA so expensive?
When it comes to high cost of housing in Orange County, it all boils down to basic supply and demand. There’s more demand for housing than available supply.
Demand for Housing in Orange County
The housing frenzy is not affecting only Orange County, but the entire country due to the economic conditions:
Millennials (the largest segment of the population) entering the homebuying market
Historically low interest rates (<3%)
Massive shift to remote work spurred by the pandemic
Folks who previously worked in HCOL areas like San Francisco or New York City are now relocating to OC and bringing high salaries with them
FOMO mentality (“get in now before you’re priced out!”)
That said, Orange County’s housing market has been especially white-hot. It’s no surprise given all of the great things that have always attracted people to OC:
Warm climate year-round, including mild winters
Public parks and myriad opportunities for outdoor recreation
Geographic diversity: Beaches, desert, forest
Diverse culinary scene (of note: Mexican and Vietnamese food)
Population diversity in virtually every category (age, race, religion, politics, etc.)
Large, high-profile companies like Disney = many job opportunities
Proximity to destinations like Los Angeles, San Diego, Palm Springs, and Las Vegas, and several national parks
Two major amusement parks: Disneyland and Knott’s Berry Farm
Relatively low crime rates
Excellent schools, including high schools, community colleges, and 4-year universities
Spacious streets for easy driving
Abundant free parking
A clean, upscale appearance
And the list goes on!
OC’s low housing supply
We’ve talked about demand. What about the supply?
Historically low property taxes reduce the incentive for older OC residents to downsize when their children move out. So, the only solution is to build more.
However, new residential construction in OC tends to be strongly opposed by long-time residents. And the reasons for this opposition generally fall into one of two categories:
1) Identity: Orange County has formed an identity around its open skyline and sprawling suburban appearance.
2) Typical concerns that come along with higher population density: housing values adjusting downward, traffic concerns, safety, etc.
Final thoughts
Issues of housing and housing affordability are complex. However, one thing is for certain: Orange County remains a top-tier destination for folks that want to optimize their quality of life and vitamin D intake!
