Anaheim Housing Market Forecast for the Next 2 Years: 2025-2026

The Anaheim housing market forecast for the next 2 years, 2025-2026, suggests a continued, albeit potentially slower, growth trajectory compared to the recent past. While the market has seen impressive price increases and strong demand in the recent years, factors like rising interest rates and a potential economic slowdown might influence the market's performance in the coming period.

I anticipate that we'll see a shift towards a more balanced market, with less intense competition and perhaps a slight moderation in price gains. However, Anaheim's strong fundamentals, desirable location, and robust job market are likely to support continued growth in the long run.

Let's delve deeper into the specific aspects of the Anaheim housing market to gain a more comprehensive understanding of what we can expect in the coming years.

Anaheim Housing Market Forecast 2025-2026

Home Sales

In recent months, the Anaheim housing market has shown signs of a cooling trend. According to Redfin, as of October 2024, the number of homes sold increased to 129, reflecting a 9.3% year-over-year growth. While this is positive, the pace of growth has started to slow down compared to earlier periods.

I believe that this trend might continue in the next couple of years. The rising interest rates have impacted affordability for many buyers, which can lead to a slight reduction in purchase activity. However, the demand for housing in Anaheim remains strong due to its proximity to major employers, entertainment hubs like Disneyland, and good schools.

My prediction is that home sales will likely continue at a steady pace, but the rapid growth we saw in the past might not be sustained. Buyers might become more cautious, and sellers might need to adjust their expectations.

Home Prices

Anaheim home prices have experienced a significant surge in the past year, with the median sale price reaching $945,000 in October 2024, which is a 10.6% increase compared to the previous year. This upward trend can be attributed to several factors, including limited inventory, strong buyer demand, and a robust economy in the region.

However, looking forward, I anticipate that the pace of home price appreciation might moderate. The increasing interest rates have made mortgages more expensive, impacting affordability for a significant portion of buyers.

My personal opinion is that the Anaheim housing market will likely experience a slower pace of appreciation in the coming years. Instead of double-digit percentage gains, we might see increases in the 5-7% range. This slower pace is a healthy adjustment that would make the market more accessible to a wider range of buyers.

Housing Supply

The housing supply in Anaheim has been a significant constraint in recent years. The limited number of homes available for sale has contributed to the strong competition among buyers and the rapid increase in home prices. The current market conditions haven't significantly impacted this challenge.

In the next couple of years, I expect the housing supply situation to remain relatively tight. Construction projects might take time to come online, and regulatory hurdles can also add delays. Moreover, the strong population growth in the area continues to put pressure on the housing stock.

We might see some incremental improvements in the housing supply, but it's unlikely to dramatically shift the balance between supply and demand in the short term. This continued tightness in the market might further influence home prices and sales activity.

Market Trends

The Anaheim housing market has been experiencing a noticeable shift in recent times. The previously red-hot seller's market is gradually transitioning towards a more balanced state.

Here's a table outlining some of the key trends:

Trend	Current Situation	Forecast (2025-2026)
Competition	Very Competitive	Moderately Competitive
Days on Market	31 Days	35-40 Days
Sale-to-List Price Ratio	100.6%	98-102%
Homes Sold Above List Price	49.6%	40-45%
Homes with Price Drops	20.7%	25-30%
Buyer Demand	Strong	Stable to slightly declining
Seller's Market/Buyer's Market	Transitioning from Seller's to Balanced	Balanced to slight Buyer's advantage in certain segments

Is Anaheim a Buyer's or Seller's Housing Market?

Currently, the Anaheim housing market is in a state of transition, moving away from a strong seller's market towards a more balanced scenario. While sellers still hold an advantage, buyers are finding a bit more breathing room compared to the previous months.

In the next 2 years, I predict that the Anaheim housing market will lean slightly towards a buyer's market in certain segments. With increasing inventory and a moderation in price growth, buyers might have more negotiating power. However, I wouldn't expect a drastic shift towards a strong buyer's market. The strong underlying fundamentals of Anaheim are likely to keep the market relatively stable.

Are Home Prices Dropping?

While the rate of home price appreciation is likely to slow down, I don't anticipate a significant drop in home prices in the Anaheim housing market during the next 2 years. The market fundamentals remain strong, and the demand for housing in Anaheim is expected to continue.

However, there might be pockets within the market where price reductions are possible. Homes that are overpriced or have not been well-maintained might face challenges in attracting buyers, potentially leading to price adjustments. This is a natural aspect of any healthy housing market.

In the bigger picture, I believe that Anaheim home prices will likely continue to rise, but at a more moderate pace compared to the recent past.

Migration and Relocation Trends

The Anaheim housing market also reflects the migration patterns of the area. In the recent period, about 21% of Anaheim homebuyers searched to move out of Anaheim, whereas 79% looked to stay within the metropolitan area.

Where are people moving to Anaheim from?

Anaheim attracts buyers from various locations across the nation, with a significant portion coming from other metropolitan areas. Notably, San Francisco, New York, and Hermiston were among the top origins of buyers seeking homes in Anaheim.

Where are people from Anaheim moving to?

Relocation data suggests that a majority of Anaheim residents choose to stay within the metropolitan area. However, those who are moving out are often heading towards locations like San Diego, Las Vegas, and Bakersfield. These destinations could offer a combination of affordability, lifestyle, or job opportunities that resonate with those moving out of Anaheim.

Impact of External Factors

Several factors outside of the local Anaheim housing market could influence the market's future. These include:

• Interest Rates: The Federal Reserve's decisions on interest rates have a direct impact on mortgage rates. Higher interest rates can make borrowing more expensive, impacting affordability for buyers and potentially slowing down the market.
• Economic Conditions: A slowdown in the national economy can impact job markets and consumer confidence. This, in turn, could affect the demand for housing, particularly in the luxury or higher-priced segments.
• Inflation: High inflation can erode purchasing power, impacting affordability and consumer confidence. It can also increase the cost of building materials, potentially slowing down new construction projects.
• Job Market: Anaheim's strong job market, driven by factors like tourism, manufacturing, and the entertainment industry, has historically been a strong support for the housing market. Any change in job growth or stability in the region could influence demand for housing.

It's important to keep these external factors in mind when considering the Anaheim housing market forecast for the next couple of years. My personal opinion is that the Anaheim market is resilient, and even though these external forces might bring a degree of uncertainty, the area's solid fundamentals are likely to support it in the long run.

Conclusion

The Anaheim housing market forecast for the next 2 years, 2025-2026, paints a picture of a market that will likely see a continued but moderated growth compared to recent times. While the pace of price appreciation and sales might slow down due to factors like rising interest rates and potential economic headwinds, the fundamentals of the market—the strong job market, attractive lifestyle, and the region's desirability—are likely to provide support for continued growth.

I expect the market to transition towards a more balanced state, with a potential slight advantage for buyers in certain segments. However, Anaheim's housing market is expected to remain relatively healthy and resilient in the long term.

Is Anaheim More Expensive Than LA: Housing Cost Showdown

While both Anaheim and Los Angeles are part of the sprawling Los Angeles metropolitan area, their housing markets have some key differences in terms of affordability. Here's a breakdown:

Generally, Anaheim is less expensive for housing than Los Angeles.

Data suggests Anaheim's median sale price sits below that of Los Angeles. This translates to potentially finding a bigger home or a better deal on a similar property in Anaheim compared to LA.

Let's explore the details:

• Median Sale Price: Anaheim's median sale price might be around $917,000 (based on sources like Zillow or Redfin, as of June 2024). Los Angeles, on the other hand, could have a higher median sale price, potentially exceeding $1 million.
• Market Competition: Both cities experience competitive markets, but Anaheim might see slightly less intense competition compared to the high demand in Los Angeles. This could translate to a bit more breathing room for negotiations in Anaheim.

However, consider these additional factors:

• Specific Neighborhoods: Within each city, housing costs can vary greatly depending on the neighborhood. Prime locations in Anaheim can still be quite expensive, while some outlying areas of LA might offer more affordable options.
• Inventory Levels: The amount of available housing can affect pricing. While Anaheim might have a slight edge in affordability, Los Angeles might have a wider variety of housing options depending on your needs.

FAQs:

Q: How's the Anaheim housing market doing in 2024?

A: The market has been on the rise in recent years, with homes selling close to or above asking price. Homes are also selling quickly, going pending in around 11 days on average (as of April 2024 data). It remains competitive in 2024, but there might be some subtle shifts. While home prices are still up year-over-year, the rate of increase might be slowing down compared to 2023.

Q: Is it a seller's or buyer's market in Anaheim right now?

A: It leans more towards a seller's market. The median sale-to-list ratio exceeding 1 indicates homes are selling close to or above asking price. However, with a potential cooling off period on the horizon, the market might gradually transition towards a more balanced state.

Q: Are home prices expected to keep going up?

A: Forecasts for the Los Angeles-Long Beach-Anaheim area (MSA) suggest a slight price correction in the next year. A modest increase is possible in June 2024, but prices might stagnate or see a small decrease by May 2025.

Q: Does this mean the housing market will crash?

A: Not likely. A slight decline is more indicative of a shift towards a balanced market with moderate price growth, which is sustainable in the long run.

Q: How will this impact Anaheim specifically?

A: Anaheim's market is likely to follow similar trends to the broader Los Angeles area. We might see a short-term increase, prices holding steady mid-term, and a possible moderate decline by May 2025.

Q: Where can I find the most up-to-date information?

A: Consider consulting a local real estate agent. They can provide insights on specific Anaheim neighborhoods, current listings, and factors influencing future home values.

Q: What factors could influence the Anaheim housing market in the coming months?

A: Several factors could play a role:

• National interest rates: Rising interest rates could make borrowing more expensive, potentially impacting buyer demand.
• Local economic conditions: A strong Anaheim economy could bolster buyer confidence and keep demand steady.
• New housing developments: An influx of new listings could affect overall inventory levels and potentially influence pricing.

Q: Should I wait to buy a house in Anaheim?

A: This depends on your individual circumstances and risk tolerance. If you're comfortable with a potentially more competitive market and faster price increases, buying sooner might be an option. However, if you prioritize affordability and are comfortable waiting for a potential price correction, waiting could be a strategy. Consulting a financial advisor can help you make an informed decision.