South Orange County Buyers Are Finally Getting Inspection Contingencies Back – Here’s What Changed

Written by:

Alejandra Rodriguez

Date:

23 Apr 2026

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After three years of buyers waiving inspections to compete, the South Orange County housing market has entered a new phase. Homes that once triggered bidding wars within days now often sit for weeks, and sellers who previously refused contingencies are now offering them upfront.

“Three years ago, if you tried to buy a property with a contingency, you were all the way down on the bottom of the list,” says Leilani Serrao-Baker, founder of Civitas Realty in Dana Point. Today, contingent offers are not only accepted — they have become standard practice.

For buyers who have been waiting for the market to cool, this is what a more balanced market looks like.

What Buyers Are Experiencing

Open houses in Dana Hills and Laguna Niguel now feature sign-in sheets with just a few names — far fewer than the crowds seen last year. Sellers who listed at aggressive prices are reducing them after two weeks without offers. The inspection waivers that were once required to compete are no longer required.

In Dana Point, 31 percent of listings have reduced their prices in the past 60 days. Homes are staying on the market longer, and buyers are taking their time — often waiting for the first price cut before scheduling a showing.

“The first two weeks of putting your property on the market are the most important,” Serrao-Baker says. If a home fails to attract interest quickly, buyers assume it is overpriced and move on.

Three Forces Behind the Market Shift

Several factors have tipped the balance back toward buyers and away from the frenzy of the past few years.

Inventory Is Outpacing Demand

The number of homes for sale is increasing faster than the number of active buyers. This growing supply gives buyers more options and reduces competition. According to Serrao-Baker, “Supply is building faster than demand is keeping up right this second.” As a result, buyers can afford to be selective and take more time to make decisions.

Interest Rates Are Causing Stop-and-Go Activity

Small changes in mortgage rates have an immediate effect on buyer behavior. When rates dipped earlier this year, the market briefly heated up, with multiple offers and quick sales returning. But as rates rose again, demand cooled quickly. Many buyers are now waiting for more rate stability before making a move. This has created what Serrao-Baker calls “little micro bubbles” — short bursts of intense activity followed by periods of slowdown. The current market is in one of those slower phases.

Sellers Are Overpricing Listings

Many sellers are listing homes above market value, often based on outdated expectations or unrealistic optimism. These overpriced homes sit longer, and once price reductions begin, buyers become even more cautious.

Serrao-Baker notes that homes priced correctly still sell quickly — sometimes within nine days. But those that start too high linger, adding to the inventory and giving buyers even more choices.

How the Timeline Has Changed

The urgency that defined the market in 2023 has faded. Buyers no longer have to make offers within 48 hours or waive inspections and appraisals to compete. Now, buyers often take a week or more to decide, and contingencies have returned as a standard part of the negotiation process.

Serrao-Baker recently represented three clients who bought and sold at the same time — something that was nearly impossible during the peak. She explains that while coordinating both sales and purchases remains challenging, it is now far more feasible because sellers are willing to accept contingent offers.

What Buyers and Sellers Should Do Now

For Buyers

– Ask for an inspection contingency. Most sellers are accepting them again. Even if you cannot negotiate repairs, an inspection will clarify what you are purchasing.

– Be patient with overpriced homes. With 31 percent of Dana Point listings recently cutting prices, waiting for a reduction can save thousands.

– Move quickly on well-priced homes. Properties priced accurately still sell quickly, so if a home fits your budget and needs, don’t delay.

For Sellers

– Price correctly from the start. Overpricing leads to longer market times and eventual price cuts, which make buyers suspicious.

– Consider offering a closing cost credit. With buyers negotiating again, incentives can help your home stand out and encourage faster offers.

– Invest in professional staging and photography. With more inventory, presentation is more important than ever to attract serious buyers.

The Bottom Line

South Orange County’s housing market has shifted from a seller-dominated environment to a more balanced landscape. Buyers now have time to think, negotiate, and protect themselves with contingencies. However, homes that are well-priced and professionally presented still move quickly, often within days.

Serrao-Baker emphasizes, “Homes that are presented well, priced properly, and marketed well go quickly. Those can go within nine days.”

What This Means

The return of contingencies and slower sales signals a healthier, more predictable market for both buyers and sellers. Buyers no longer need to take excessive risks to secure a home, and sellers must adjust their strategies to align with current conditions. As rates, inventory, and buyer expectations continue to fluctuate, staying informed and realistic will be critical for anyone planning a move in South Orange County this year.

About the Expert: Leilani Serrao-Baker is the founder and a realtor at Civitas Realty in Dana Point, California. She specializes in coastal and inland South Orange County communities, with expertise in probate, trust sales, and helping buyers navigate competitive markets.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.