Laguna Hills, a picturesque city nestled in the rolling hills of Orange County, California, has long been admired for its serene suburban charm, family-friendly atmosphere, and proximity to major economic hubs like Irvine and Costa Mesa. As of March 27, 2025, the city continues to evolve, balancing its commitment to preserving its natural beauty and community strengths with the pressing demands of a growing population and a dynamic housing market. This blog post dives deep into Laguna Hills’ growth plan, its housing market trends, and the interplay between urban development and economic vitality, offering insights for residents, prospective homebuyers, and investors alike.
Laguna Hills’ Growth Plan: A Vision for the Future
Laguna Hills’ growth strategy is rooted in its General Plan, a comprehensive long-range planning document that serves as a blueprint for the city’s physical development. Last comprehensively updated in 2009, the General Plan emphasizes preserving the city’s natural setting—think rolling hills, miles of trails, and connected open spaces—while fostering attractive neighborhoods and a robust local economy. However, one of its most critical components, the Housing Element, is updated every eight years as mandated by California state law, ensuring the city adapts to changing housing needs.
The current Housing Element cycle, spanning 2021-2029 (the 6th Housing Cycle), reflects Laguna Hills’ commitment to meeting its Regional Housing Need Assessment (RHNA) allocation of 1,985 new housing units. This “fair share” allocation, determined by the Southern California Association of Governments (SCAG), requires the city to plan for housing across various income levels—very low, low, moderate, and above moderate—to accommodate both current residents and future growth. While the city isn’t obligated to build these units itself, it must identify sites and adjust zoning to facilitate development, removing barriers to construction as required by state laws like the Housing Accountability Act.
A significant milestone in this effort came in 2024, when the Laguna Hills City Council adopted zoning amendments to implement the Housing Element. These changes included modifying high-density residential standards in the Mixed-Use (MXU) zoning district, establishing a Housing (H) Overlay Zone with specific development provisions, and rezoning candidate sites identified in the Housing Element. Additionally, citywide objective design standards for multi-family and mixed-use projects were introduced to streamline approvals and ensure aesthetic consistency. These updates signal a proactive approach to housing, aligning with state mandates while aiming to maintain the city’s character.
One of the most ambitious projects tied to this growth plan is the transformation of the former Laguna Hills Mall into “The Village at Laguna Hills.” Approved in March 2022 by a narrow 3-2 City Council vote, this mixed-use development spans 68 acres and includes 1,500 apartment units, retail outlets, office space, a community park, and a hotel. While it advances the city’s RHNA goals by adding significant housing stock, critics have noted its limited contribution to very low-income units (none of the 568 required are included). Still, proponents highlight its economic benefits, such as the hotel’s revenue generation and the revitalization of a once-declining commercial site. The project exemplifies Laguna Hills’ strategy of blending residential growth with economic development, a cornerstone of its long-term vision.
The Housing Market in Laguna Hills: Trends and Dynamics
Parallel to these planning efforts, Laguna Hills’ housing market has been a hotbed of activity, reflecting broader trends in Orange County and Southern California. As of early 2025, the market remains highly competitive, driven by strong demand, limited inventory, and the city’s desirable lifestyle offerings. Let’s break down the key trends shaping this landscape.
Rising Prices and Competitive Conditions
Recent data paints a vivid picture of a seller’s market. In February 2025, the median home price in Laguna Hills reached $1.4 million, a staggering 47.3% increase from the previous year, according to Redfin. This surge reflects not only local demand but also broader inflationary pressures and the premium placed on suburban living post-pandemic. Homes typically receive multiple offers—averaging three per listing—and sell in about 22 days, down from 31 days the prior year, signaling a fast-paced market where buyers must act quickly.
The median price per square foot stands at $680, up 2.4% year-over-year, though this growth is modest compared to the overall price jump, suggesting larger homes or premium properties are driving the median higher. With a median sale price 227% above the national average, Laguna Hills remains one of California’s pricier markets, appealing to affluent buyers seeking quality schools, safe neighborhoods, and proximity to job centers.
Inventory Challenges
Despite growth initiatives, housing inventory remains tight. In December 2024, Rocket Homes reported 46 active listings, a 22% decrease from November, with a median price of $1.15 million (up 3.9% from the prior year). This scarcity fuels competition, as demand consistently outstrips supply. The Village at Laguna Hills, once fully realized, will ease some pressure by adding 1,500 units, but with only 16 homes sold in February 2025 (down from 21 the year before), the market hasn’t yet felt significant relief.
Inventory by bedroom type fluctuates monthly, with December 2024 showing declines in one- and two-bedroom homes (down 33.3% and 40%, respectively) and stability in four-bedroom options. This suggests a market skewed toward larger family homes, aligning with Laguna Hills’ demographic as a haven for families and professionals.
Economic and Lifestyle Drivers
Several factors underpin this market strength. Orange County’s robust economy—marked by low unemployment and high wages in sectors like healthcare, technology, and education—draws residents to Laguna Hills, boosting housing demand. The city’s lifestyle amenities, including parks, trails, and top-rated schools in the Saddleback Valley Unified School District, further enhance its appeal. Limited land for new construction, a regional challenge, constrains supply, pushing prices upward as buyers vie for existing homes.
Interplay Between Growth Plan and Housing Market
Laguna Hills’ growth plan and housing market are deeply intertwined, with planning decisions directly influencing market dynamics. The Housing Element’s rezoning efforts aim to increase density in strategic areas, such as the MXU district and the H Overlay Zone, encouraging multi-family developments to meet RHNA targets. The Village at Laguna Hills is a prime example, converting a commercial relic into a residential hub, though its focus on market-rate and moderate-income units highlights a gap in affordable housing solutions.
This gap poses a challenge. While the city has planned for 1,985 units, including 568 very low-income ones, projects like The Village fall short of addressing the full spectrum of need. Market forces favor higher-end development, as evidenced by the $1.4 million median price, making affordability a persistent issue. State pressure to remove housing barriers has spurred zoning changes, but the pace of construction—and its alignment with income diversity—remains a work in progress.
Economically, the growth plan bolsters the market by attracting investment. The Village’s hotel and retail components promise revenue for city services, while its apartments cater to professionals seeking suburban convenience near urban job hubs. This synergy supports property value growth, with forecasts from sources like Designated Local Expert predicting median prices could hit $1.4 million by year-end 2024 (a mark already surpassed in early 2025), driven by sustained demand and limited supply.
Looking Ahead: Opportunities and Challenges
As Laguna Hills navigates its growth trajectory through 2025 and beyond, several opportunities and challenges emerge. For homebuyers, the competitive market demands agility—pre-approvals, flexibility on budget, and readiness to bid above asking are key. Sellers, meanwhile, can capitalize on high demand, especially with well-maintained or updated properties, though pricing competitively remains critical as inventory slowly grows.
Investors eyeing Laguna Hills should note its long-term potential. NeighborhoodScout reports a 6.71% annual appreciation rate over the past decade, with a 9.46% jump in the last year alone, outpacing 81.35% of U.S. markets. The Village at Laguna Hills could further stabilize supply, potentially moderating price spikes, but its completion timeline and affordability impact are variables to watch.
Challenges include balancing growth with community identity. Residents value Laguna Hills’ tranquility and open spaces, and overdevelopment risks eroding these qualities. Traffic congestion, already a concern near the 5 Freeway, could worsen with new residents, necessitating infrastructure upgrades. Additionally, the affordability crisis—exacerbated by a market favoring high-end homes—requires creative solutions, perhaps through inclusionary zoning or partnerships with affordable housing developers.
Conclusion
Laguna Hills stands at a crossroads in March 2025, blending its suburban allure with ambitious growth plans and a thriving housing market. The city’s General Plan and Housing Element updates reflect a forward-thinking approach, tackling state mandates while fostering economic vitality through projects like The Village at Laguna Hills. Yet, the housing market’s competitiveness, driven by low inventory and high demand, underscores the need for strategic development that serves all income levels.
For those considering a move to or investment in Laguna Hills, the outlook is promising but nuanced. The city’s blend of lifestyle, location, and economic opportunity ensures its appeal, but navigating its market requires diligence and adaptability. As Laguna Hills continues to grow, its ability to harmonize expansion with its cherished community ethos will shape its future—and its place in Orange County’s evolving landscape. Whether you’re a resident, buyer, or observer, Laguna Hills’ story is one of transformation worth watching.
