State of the Market, Fall 2026: The Market Is Changing for the First Time in Three Years

For three years, the housing market in Brea, Chino Hills, Walnut, and the surrounding cities has been stuck in the same pattern. Few homes came up for sale. Few buyers stepped up. Prices held steady. Every spring looked like the spring before it.

This summer, that pattern started to break, and it’s breaking on both sides at once. More homeowners are selling because holding on has gotten too expensive. Fewer buyers are showing up. Here’s what the local numbers say, what’s behind them, and what it means for you.

What happened in the housing market from 2023 to early 2026?

Almost nothing changed, and that was the story. Every spring, roughly 700 homes a month came on the market at the peak. Every month, about the same number of buyers bought. Closed sales stayed between 800 and 1,000 a month, year after year. Lay the 2024 and 2025 charts on top of each other and you can barely tell them apart.

That stability had a simple cause. Most homeowners in Diamond Bar, Yorba Linda, and La Habra are sitting on a mortgage rate under 4% and a lot of equity. Selling means giving up that rate and paying today’s prices for the next home. For most people, the math didn’t work, so they stayed. Supply stayed low.

On the buyer side, the only people buying were the ones who had to. A new baby, a marriage, a divorce, a job transfer, a parent passing. Those buyers don’t wait for rates to drop because life doesn’t let them. They showed up in the same numbers every year, which kept demand steady even when the economy wobbled.

Low supply plus steady demand equals stable prices. The median home price rose from about $850,000 to $980,000 over those three years. On a per-square-foot basis, prices have been flat at roughly $570 since late 2024.

What changed in the summer of 2026?

Both sides of the equation started to move. Inventory is at a five-year high. Homes are taking longer to sell. Sellers are conceding on price. And the number of homes going into escrow dropped sharply in August.

The clearest way to see it is months of supply. That’s how long it would take to sell every home on the market at the current pace. Under 3 months is a seller’s market. Between 3 and 6 is balanced. We just hit 3.5, the highest reading in five years.

Who is selling now, and why is it different?

A new kind of seller is showing up, and we haven’t seen them in three years. These aren’t investors cashing out or families trading up. They’re people selling because holding on has gotten too expensive.

The first group is longtime owners, often retirees, who own their homes outright. They have plenty of equity but not much monthly income. Property taxes, insurance, and upkeep keep climbing. Harvard’s housing research center found that costs for homeowners without a mortgage have risen 28% since before the pandemic, and nearly half of the growth in cost-burdened homeowners since 2019 has been people over 65. California insurance premiums are projected to rise another 16% this year, the biggest jump in the country. When a roof or a plumbing job costs $30,000 and the fixed income doesn’t stretch, selling becomes the only option.

The second group is people who bought in 2022, 2023, or 2024. They paid top-of-market prices at 6 to 7% rates, and many stretched to do it. National surveys of recent buyers found that 43% have struggled to make a mortgage payment on time and 47% say they feel in over their heads financially. Add rising insurance, higher grocery and gas bills, and a repair or two, and the budget breaks.

Most of these sellers never show up in foreclosure statistics. In Rowland Heights, Chino Hills, and Brea, homeowners have enough equity that they sell before the bank gets involved. The chart below is the visible tip. The sellers I’m meeting are the much larger group underneath it who are choosing to sell while they still control the timing.

Who is buying, and why are there fewer of them?

For three years, buyers showed up in the same numbers because the ones buying had to. Life events don’t check mortgage rates.

That group is now thinner. Showings per listing are down 5% from last year, at about 3.5 a month. Homes are taking longer to sell: 36 days on average, up 16%. Sellers are accepting a little less than asking. The typical home now sells at 98.5% of its original list price, the lowest since early 2023.

And the August pending number, 290 homes going into escrow versus about 500 a year ago, is the sharpest one-month drop in the five-year record.

The good news is that the buyers still out there are serious. It’s taking fewer showings to get a home into escrow than it did last spring. Buyers aren’t browsing. They’re deciding, and they’re deciding on the homes that are priced right.

What does this mean if you’re selling, buying, or staying put?

What should you watch heading into spring 2027?

• September and October pending sales. If they come in near 400, August was a blip. If they stay near 300, demand has genuinely stepped down.
• New listings versus pending sales. August was 555 new listings against 290 pendings, nearly 2 to 1. If that ratio holds through fall, prices will feel it by spring.
• Whether Notice of Default filings turn into listings. So far they haven’t. When they do, inventory rises and prices soften.

I’ll publish the next State of the Market in February, right before the spring selling season. If you’d like it in your inbox, join the list here.

Frequently asked questions

Data note: Local figures are from CRMLS for a custom area covering the East San Gabriel Valley, Chino Valley, and North Orange County, residential properties, through August 2026. Notice of Default counts are from a title-industry data provider. National cost and delinquency figures are from the Harvard Joint Center for Housing Studies, the Mortgage Bankers Association, Zillow, and Clever Real Estate. August pending sales may be revised as late-reported escrows are entered. This report is for general information and is not financial, legal, or tax advice.