As we move deeper into 2025, the housing market in San Juan Capistrano, California, continues to reflect the complexities of a region balancing historic charm, modern growth, and state-mandated housing pressures. Nestled in South Orange County, this picturesque city is known for its mission heritage, equestrian trails, and small-town ambiance. However, beneath its serene surface lies a housing inventory crisis that poses significant supply challenges for residents, prospective buyers, and policymakers alike. In this blog post, we’ll explore the current state of San Juan Capistrano’s housing inventory, the factors driving its supply constraints, and what these challenges mean for the community in 2025.
The Current Housing Landscape in San Juan Capistrano
San Juan Capistrano’s real estate market has long been characterized by high demand and limited supply—a classic seller’s market where prices trend upward and homes sell quickly. As of early 2025, data from sources like Rocket Homes indicates that the median home price in San Juan Capistrano sits at approximately $1.376 million, an 8.5% increase from the previous year. Meanwhile, the inventory of homes for sale remains tight, with just 102 homes available in December 2024—a number that reflects a persistent decline across various bedroom types compared to prior months. For instance, the inventory of two-bedroom homes dropped by 46.2%, three-bedroom homes by 30%, and four-bedroom homes by 36.4% from November to December 2024.
This shrinking inventory translates to a mere 2.2-month supply, well below the 5- to 6-month threshold typically considered a balanced market. Homes are spending an average of 46 days on the market, up 48.4% from the previous year, suggesting a slight cooling in sales pace but still indicative of strong demand relative to supply. The competitive nature of the market is further underscored by the fact that 57.9% of homes sold below asking price in December 2024, yet 21% still fetched above asking, reflecting a polarized buyer pool willing to stretch budgets for the right property.
Key Drivers of Supply Challenges
Several interconnected factors contribute to San Juan Capistrano’s housing inventory woes in 2025. Understanding these drivers is crucial to grasping the broader supply challenges facing the city.
- Geographic and Zoning Constraints
San Juan Capistrano spans just 14.12 square miles, much of which is already developed or preserved for historical and environmental reasons. The city’s commitment to maintaining its quaint, low-density character—epitomized by the iconic Mission San Juan Capistrano and sprawling ranches—limits the availability of vacant land for new housing. While the 2014-2021 Regional Housing Needs Assessment (RHNA) identified over 311 acres of developable land with capacity for 772 units, much of this potential remains unrealized due to zoning restrictions and community pushback against high-density projects. - State Housing Mandates
California’s aggressive push to address its housing crisis has placed significant pressure on cities like San Juan Capistrano. The current RHNA cycle (2021-2029) mandates the city to plan for 1,054 new housing units, including a mix of low-, moderate-, and above-moderate-income options. However, state laws—such as those allowing developers to bypass local height and parking restrictions near transit hubs like the San Juan Capistrano train station—often clash with the city’s vision. A recent example is the approval of a five-story, 446-unit apartment building in January 2025, which sparked concerns among council members and residents about preserving the city’s small-town feel. While such projects boost supply, they don’t always align with local preferences or infrastructure capacity. - Community Resistance to Development
Residents of San Juan Capistrano have historically resisted large-scale developments that threaten the city’s charm or strain its infrastructure. The proposed 107-unit, six-story complex on Don Juan Avenue, for instance, was met with fierce opposition in 2024, leading the city to purchase the property for $2.35 million to redevelop it as affordable senior housing instead. While this move addressed some concerns, it also reduced the total number of units that could have been built, further tightening supply. This tension between growth and preservation continues to hinder inventory expansion. - Construction Costs and Delays
Rising construction costs, labor shortages, and supply chain disruptions—lingering effects of the post-pandemic economy—have slowed the pace of new housing projects in 2025. Developments like Salida del Sol, a 49-unit affordable housing complex paired with a new City Hall, are slated for completion in early 2025, but such initiatives are drops in the bucket compared to the city’s needs. High costs also deter smaller developers, leaving the market reliant on larger firms that prioritize profitable, high-end homes over affordable options. - Affordability Gap
With a median home price exceeding $1.3 million and a cost of living 56% above the national average, San Juan Capistrano’s housing market caters primarily to affluent buyers. This focus exacerbates the supply shortage for middle- and low-income households, as developers have little incentive to build affordable units without significant subsidies or regulatory incentives. Programs like Section 8 vouchers and the city’s rent control measures (capping annual increases at 3.3% for 2025-2026) help some residents, but they don’t address the root issue of insufficient housing stock.
Implications for 2025
The supply challenges in San Juan Capistrano’s housing inventory carry significant implications for the city’s residents, economy, and future growth.
- Rising Prices and Competition
Limited inventory will likely keep home prices elevated throughout 2025, pricing out first-time buyers and pushing demand toward surrounding areas like San Clemente or Capistrano Beach. The competitive market—where homes still receive multiple offers despite longer days on market—will favor cash buyers and those with substantial financial flexibility, widening the socioeconomic divide. - Strain on Infrastructure
As new projects like the five-story San Juan Plaza development (approved in January 2025) come online, concerns about traffic congestion, parking, and utility capacity will intensify. Residents have already voiced worries about Camino Capistrano and nearby grocery store parking lots becoming overwhelmed, a problem that could worsen without proactive planning. - Affordable Housing Shortfalls
While initiatives like Salida del Sol and the Don Juan Avenue senior housing project signal progress, they fall short of meeting the RHNA mandate and the broader need for affordable options. Without a significant increase in low- and moderate-income units, San Juan Capistrano risks losing its economic diversity, as younger families and essential workers are forced to look elsewhere. - Policy and Community Tension
The tug-of-war between state mandates and local control will likely escalate in 2025. City officials, constrained by laws that limit their ability to downsize or reject projects, may face growing frustration from residents who feel their voices are being sidelined. Balancing growth with preservation will remain a delicate act.
Potential Solutions
Addressing San Juan Capistrano’s housing inventory challenges requires a multifaceted approach that respects the city’s character while meeting modern demands. Here are some potential strategies for 2025:
- Leverage Accessory Dwelling Units (ADUs)
With over 5,381 single-family homes eligible for ADUs under updated zoning laws, encouraging homeowners to build “granny flats” or convert garages could add hundreds of units over the next few years. Incentives like tax breaks or streamlined permitting could accelerate this process. - Targeted Redevelopment
The city could identify underutilized commercial or industrial sites for mixed-use projects that blend housing with retail, minimizing the impact on residential neighborhoods. The success of the City Hall-Salida del Sol partnership demonstrates the potential of such public-private collaborations. - Regional Collaboration
Partnering with neighboring cities to share the burden of RHNA goals could ease pressure on San Juan Capistrano’s limited land. Joint infrastructure investments might also mitigate concerns about traffic and utilities. - Incentivize Affordable Housing
Offering developers density bonuses or expedited approvals for projects that include a higher percentage of affordable units could shift the market toward broader accessibility. State and federal grants could further offset costs. - Community Engagement
Transparent dialogue between residents, developers, and officials—perhaps through town halls or design charrettes—could help align new projects with local values, reducing opposition and fostering consensus.
Looking Ahead
San Juan Capistrano’s housing inventory challenges in 2025 reflect a broader struggle faced by many California cities: how to grow responsibly in an era of scarcity and mandates. While the city’s median home prices and competitive market signal robust demand, the shrinking supply threatens affordability, diversity, and long-term sustainability. By embracing innovative solutions and balancing preservation with progress, San Juan Capistrano can chart a path forward that honors its past while meeting the needs of its future residents. For now, prospective buyers and policymakers alike will need to navigate a market where supply remains the defining constraint—and the key to unlocking the city’s housing potential.
