The Tustin, California, housing market has been a focal point for homebuyers, sellers, and investors alike, given its prime location in Orange County and its reputation for vibrant communities, excellent schools, and proximity to major economic hubs. As we look ahead to the next 12 months, from May 2025 to May 2026, understanding the trends, predictions, and influencing factors in Tustin’s real estate landscape is crucial for making informed decisions. This blog post dives deep into the Tustin housing market forecast, exploring price trends, inventory dynamics, economic factors, and expert predictions to provide a comprehensive outlook.
Current State of the Tustin Housing Market
As of December 2024, Tustin’s housing market remains a competitive, seller-driven environment. According to recent data, the median home sale price in Tustin was $1,172,875, reflecting an 11.5% increase from the previous year. The median price per square foot stood at $678, up 11.3% year-over-year. With 83 homes for sale in December 2024, inventory has tightened slightly, down 10.8% from November 2024. Homes are selling relatively quickly, with an average listing age of 30 days, though this is up 37.6% compared to the previous year, indicating a slight cooling in pace.
Tustin’s market is characterized by strong demand, particularly for single-family homes, which make up 36.42% of the housing stock, followed by large apartment complexes (35.47%) and attached homes (15.29%). The city’s appeal is bolstered by its family-friendly neighborhoods, such as Tustin Ranch, and its proximity to major employment centers in Irvine, Santa Ana, and beyond. However, high home prices—163% above the national average—combined with a cost of living 56% higher than the national median, pose affordability challenges for some buyers.
Short-Term Price Predictions: May 2025 to May 2026
Moderate Price Growth Expected
Analysts predict that Tustin home prices will continue to rise over the next 12 months, though at a more moderate pace compared to the double-digit gains seen in recent years. According to Walletinvestor, the average home price in Tustin, which was $819,126 in March 2024, is expected to increase to $840,533 by March 2025, a 2.61% rise. Extending this trend, we can anticipate a similar modest increase through May 2026, potentially bringing the median home price closer to $860,000–$870,000. This aligns with broader national forecasts, which suggest home price growth will slow to 2–3% annually as inventory expands and mortgage rates stabilize.
Regional Variations: Tustin vs. North Tustin
It’s worth noting that North Tustin, a distinct area within the Tustin region, commands higher prices, with an average home value of $1,140,320 in March 2024, projected to reach $1,166,747 by March 2025 (a 2.32% increase). North Tustin’s larger lot sizes and more exclusive neighborhoods contribute to its premium pricing. However, both Tustin and North Tustin are expected to follow similar growth trajectories, with single-family homes driving demand.
Factors Influencing Price Trends
Several factors will shape Tustin’s price trends over the next year:
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Limited Inventory: Despite a slight increase in national housing inventory (3.5 months’ supply as of early 2025), Tustin’s inventory remains tight, supporting higher prices. The 10.8% drop in listings from November to December 2024 underscores this constraint.
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High Demand: Tustin’s proximity to tech hubs, quality schools, and amenities like The District shopping center continue to attract buyers, particularly families and professionals.
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Affordability Pressures: With median prices well above $1 million, affordability will limit some buyer segments, potentially tempering price growth.
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Mortgage Rates: As of March 2025, 30-year fixed mortgage rates hover around 6.63%. Forecasts suggest rates will remain stable or slightly decline, which could boost buyer activity but not significantly enough to spark rapid price surges.
Inventory and Sales Trends
Inventory Dynamics
Tustin’s housing inventory is expected to remain constrained over the next 12 months, maintaining its status as a seller’s market. In December 2024, 32 homes were sold or pending, a 23.1% increase month-over-month, with 63% of homes selling within 30 days. However, the total number of listings (83) reflects a tight market, and new listings are not keeping pace with demand.
Nationally, experts predict a gradual increase in housing starts in 2025 and 2026, particularly for single-family homes, which could ease supply pressures in high-demand areas like Tustin. However, local zoning restrictions and high land costs in Orange County may limit new construction, keeping inventory low.
Sales Activity
Sales activity in Tustin is expected to grow moderately, driven by buyers adjusting to higher prices and rates. The National Association of Realtors notes that existing home sales are projected to increase slowly through 2029, with a 4.2% uptick in monthly sales reported in early 2025. Tustin’s competitive market, with homes receiving an average of four offers, suggests continued buyer interest, though bidding wars are less intense than in 2021–2022.
Economic and Policy Influences
Mortgage Rates and Affordability
Mortgage rates will play a pivotal role in shaping Tustin’s market. The Federal Reserve’s efforts to manage inflation have kept rates elevated, but a stabilizing economy could lead to slight rate reductions by mid-2026. If rates drop below 6%, affordability could improve, potentially increasing demand and pushing prices higher. However, Tustin’s high price point means that even lower rates may not significantly broaden the buyer pool.
Policy Changes
New policies, such as changes to real estate commissions following the National Association of Realtors’ 2024 rules, could reduce transaction costs, particularly for luxury homes in Tustin. Additionally, potential tariffs on building materials (e.g., steel, lumber) could increase new home costs, further limiting supply and supporting price growth.
Economic Growth
Orange County’s robust economy, driven by sectors like technology, healthcare, and education, underpins Tustin’s housing demand. Job growth in nearby Irvine and Costa Mesa, combined with Tustin’s appeal as a commuter-friendly city, will continue to attract buyers. However, national economic uncertainties, including inflation and potential policy shifts, could introduce volatility.
Long-Term Outlook and Investment Potential
While the next 12 months are expected to see modest price growth, the long-term outlook for Tustin remains positive. Walletinvestor projects that by 2029, the average home price in Tustin could reach $920,796, a 12.41% increase from 2024 levels. This suggests a steady, if unspectacular, return for investors. For short-term investors, flipping opportunities may be limited due to high acquisition costs and moderate appreciation rates.
Is It a Good Time to Buy or Sell?
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Buyers: Tustin remains a challenging market for first-time buyers due to high prices and competition. However, those with strong financial profiles may find opportunities in early 2025, particularly if mortgage rates dip or sellers adjust expectations in response to longer days on market. Waiting for a significant price drop is unlikely, given the market’s resilience.
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Sellers: With homes selling at or above asking price (34% sold over asking in December 2024), sellers hold the advantage. Pricing competitively and staging homes effectively can maximize returns, especially for move-in-ready properties.
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Investors: Tustin’s stable appreciation and strong rental demand make it a viable long-term investment, though short-term flipping may not yield high profits.
Neighborhood Spotlight: Tustin Ranch
Tustin Ranch, a sought-after neighborhood, offers a slightly different dynamic. In February 2025, the median sale price was $785,000, down 13.7% from the previous year, with a median price per square foot of $686. Despite the price dip, Tustin Ranch remains competitive, with homes selling in about 34 days. Its master-planned communities and proximity to top-rated schools make it a draw for families, and prices are expected to stabilize and grow modestly by May 2026.
Risks and Considerations
While Tustin’s market is robust, several risks could impact the forecast:
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Environmental Risks: Tustin faces a major heat risk, with a 214% increase in days over 92°F projected over the next 30 years. Additionally, 21% of properties are at risk of wildfire, and 11% face severe flooding risks. These factors could influence insurance costs and buyer decisions.
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Economic Shocks: A national recession or unexpected policy changes could dampen demand, though Tustin’s affluent buyer base may buffer such impacts.
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Interest Rate Volatility: If rates rise unexpectedly, affordability could worsen, slowing sales and price growth.
Conclusion
The Tustin housing market is poised for steady, moderate growth over the next 12 months, with median home prices likely reaching $860,000–$870,000 by May 2026. Tight inventory, strong local demand, and Orange County’s economic strength will support this trend, though affordability challenges and stabilizing mortgage rates may temper the pace of appreciation. For buyers, acting strategically in a competitive market is key, while sellers can capitalize on favorable conditions. Investors should focus on long-term gains, given Tustin’s resilient market and rental demand.
As always, consult with local real estate professionals and conduct thorough research before making decisions. Tustin’s blend of lifestyle, location, and stability makes it a compelling market to watch in the year ahead.
