How Tustin’s Economy Shapes Its Housing Market

Tustin, a vibrant city nestled in the heart of Orange County, California, is known for its family-friendly neighborhoods, proximity to major employment hubs, and a thriving local economy. Over the years, Tustin’s economic landscape has played a pivotal role in shaping its housing market, influencing everything from home prices to inventory levels and buyer demand. This blog post explores the intricate relationship between Tustin’s economy and its housing market, diving into key economic drivers, market trends, and the implications for homebuyers, sellers, and investors.

Tustin’s Economic Landscape: A Snapshot

Tustin’s economy is characterized by a blend of local businesses, corporate headquarters, and a strategic location that connects it to the broader Orange County and Southern California markets. With a population of approximately 77,704 as of recent estimates, Tustin benefits from a diverse economic base that includes sectors such as healthcare, technology, retail, and education. The city’s proximity to John Wayne Airport and major freeways like the I-5 and SR-55 makes it a convenient hub for professionals commuting to nearby cities like Irvine, Santa Ana, and Anaheim.

Key economic factors driving Tustin’s growth include:

1. Thriving Job Market: Orange County boasts a robust job market with an unemployment rate consistently below the national average. Tustin is home to several corporate offices and medical facilities, including the Tustin Medical Center, which employs hundreds of healthcare professionals. Additionally, nearby Irvine hosts major corporations like Blizzard Entertainment, Broadcom, and Edwards Lifesciences, providing high-paying jobs that fuel housing demand in Tustin.

2. Limited Land Availability: Tustin’s geographic constraints, combined with Orange County’s overall scarcity of developable land, limit new construction. This scarcity drives competition for existing homes, pushing prices higher.

3. Family-Oriented Appeal: Tustin’s reputation as a safe, family-friendly city with top-rated schools, such as those in the Tustin Unified School District, attracts young families and professionals. This demographic demand sustains a strong housing market.

4. Economic Policies and Trends: Broader economic factors, such as interest rates, inflation, and federal policies like tariffs, influence Tustin’s housing market indirectly by affecting affordability and buyer confidence.

These economic dynamics create a unique environment for Tustin’s housing market, which has remained a seller’s market for several years, characterized by high prices, low inventory, and rapid sales.

Tustin’s Housing Market: Current Trends

Recent data paints a clear picture of Tustin’s housing market as competitive and expensive, driven by economic factors. According to Rocket Homes, as of December 2024, the median home price in Tustin was $1,172,875, an 11.5% increase from the previous year. The median price per square foot was $678, reflecting the premium buyers pay for Tustin’s desirable location and amenities.

Key Market Statistics (December 2024):

• Homes for Sale: 83 homes were listed, a 10.8% decrease from November 2024, indicating tight inventory.

• Homes Sold: 32 homes sold, with 63% selling within 30 days, showcasing strong demand.

• Price Increases by Bedroom Type:

  • 1-bedroom homes: +18.8%

  • 2-bedroom homes: +13.2%

  • 3-bedroom homes: +12.4%

  • 4-bedroom homes: +15.8%

  • 5+ bedroom homes: +20.6%

• Average Listing Age: 30 days, up 37.6% from the previous year, suggesting homes are still selling quickly but slightly slower than before.

Redfin reports that Tustin’s housing market scores 81 out of 100 for competitiveness, with homes receiving an average of four offers and selling in about 36 days. The median sale price in February 2025 was $1.1 million, up 9% year-over-year, though specific neighborhoods like Tustin Ranch saw a 13.7% price decline, indicating some variability.

Seller’s Market Dynamics

Tustin has remained a seller’s market, where demand outstrips supply. This is driven by:

• High Demand: Professionals and families are drawn to Tustin’s quality of life, schools, and job opportunities.

• Low Inventory: A 30% decrease in listings from 2022 to 2023, coupled with limited new construction, keeps inventory tight.

• Economic Stability: Tustin’s strong job market and proximity to corporate hubs ensure a steady influx of buyers with purchasing power.

How Tustin’s Economy Influences Housing

Tustin’s economy shapes its housing market through several interconnected mechanisms:

1. Job Market and Income Levels

The thriving job market in Orange County, particularly in tech, healthcare, and finance, supports high income levels that sustain elevated home prices. Many Tustin residents work in nearby Irvine, where median household incomes exceed $100,000, enabling them to afford homes priced above $1 million. The presence of high-paying jobs also attracts out-of-town buyers, with Redfin noting that San Francisco, Houston, and Seattle homebuyers frequently search for Tustin properties.

However, this also creates affordability challenges. Tustin’s median home price is 163% higher than the national average, and the overall cost of living is 56% above the national benchmark. First-time buyers and lower-income households often struggle to enter the market, intensifying competition for smaller homes, as evidenced by the 18.8% price surge for 1-bedroom homes.

2. Limited Land and Supply Constraints

Tustin’s geographic limitations and zoning restrictions hinder new development, a critical economic factor. With only a small percentage of land available for residential construction, builders face high costs, which are passed on to buyers. This scarcity fuels a seller’s market, as noted by Designated Local Expert, where the number of homes for sale dropped 30% from 2022 to 2023.

The lack of new construction also means older homes, many built between 1970 and 1999, dominate the market. These homes, often with a “Brady Bunch” aesthetic, are highly sought after but require updates, further driving up costs for buyers.

3. Interest Rates and Economic Policies

Broader economic policies, such as Federal Reserve interest rate decisions and tariffs, indirectly impact Tustin’s housing market. As of April 2025, 30-year fixed mortgage rates were 6.64%, down slightly from the previous year but still high enough to dampen affordability. A potential recession, with a 60% probability according to J.P. Morgan and Moody’s Analytics, could lower rates further, potentially softening prices by reducing buyer demand. However, Tustin’s strong local economy may buffer it from severe downturns, as seen in its resilience during past economic cycles.

Tariffs introduced in April 2025, including a 10% baseline on imported goods, could increase construction costs, further limiting new home supply and keeping prices elevated.

4. Demographic and Lifestyle Factors

Tustin’s appeal to families and professionals drives housing demand. The city’s safe neighborhoods, parks, and schools make it a magnet for young families, while its proximity to employment centers attracts commuters. This demographic pressure sustains a competitive market, with buyers often needing to act quickly and pay premiums.

Migration trends also play a role. Tustin homebuyers are increasingly looking at more affordable markets like Las Vegas, San Diego, and Bakersfield, while out-of-state buyers from high-cost metros like San Francisco add to local demand.

Implications for Buyers, Sellers, and Investors

For Buyers

• Act Quickly: Tustin’s fast-moving market requires buyers to be pre-approved and ready to make offers, as homes often sell within 30 days.

• Expect Premiums: With median prices exceeding $1.1 million, buyers should anticipate paying above the national average and consider smaller homes or condos to stay within budget.

• Work with Experts: A local real estate agent can navigate Tustin’s competitive landscape, helping buyers identify properties that match their needs and budget.

For Sellers

• Capitalize on Demand: Sellers can benefit from high buyer interest and low inventory, potentially receiving multiple offers. Pricing strategically is key to maximizing returns.

• Highlight Upgrades: Given the age of many Tustin homes, renovated properties or those with modern amenities may command higher prices.

• Monitor Economic Trends: A potential recession or shifts in mortgage rates could soften demand, so sellers should stay informed about market conditions.

For Investors

• Long-Term Potential: Tustin’s home appreciation rates, averaging 6.78% annually over the past decade, make it a strong long-term investment. WalletInvestor predicts median home prices could reach $920,796 by 2029.

• Flipping Challenges: Short-term flipping may be risky due to high purchase prices and renovation costs, especially in a bearish market.

• Rental Opportunities: Tustin’s renter-occupied housing (common in apartments and condos) offers potential for steady rental income, given the city’s desirability.

Looking Ahead: Tustin’s Housing Market in 2025 and Beyond

Tustin’s housing market is likely to remain strong but faces uncertainties tied to broader economic trends. Experts predict home prices will rise moderately, at about 1% above inflation, through 2029, supported by low inventory and steady demand. However, several factors could shape the market:

• Mortgage Rates: If rates fall below 6%, pent-up demand could drive sales, but high rates may continue to limit affordability.

• Economic Stability: A recession could reduce buyer demand, softening prices, though Tustin’s economic resilience may mitigate impacts.

• Policy Changes: Federal initiatives to expand housing supply or roll back energy-efficient building codes could improve affordability, but tariffs may counter these efforts by raising construction costs.

Conclusion

Tustin’s economy, with its strong job market, limited land availability, and family-friendly appeal, is a driving force behind its competitive housing market. High demand, low inventory, and rising prices reflect the city’s economic vitality, but affordability challenges and broader economic uncertainties pose risks. For buyers, sellers, and investors, understanding these dynamics is crucial for navigating Tustin’s real estate landscape. By staying informed and working with local experts, stakeholders can make strategic decisions in this dynamic market.

If you’re considering buying, selling, or investing in Tustin, now is the time to act with clarity and confidence. Reach out to a local real estate professional to explore your options and seize opportunities in this vibrant market.