San Diego Housing Market: Trends and Forecast 2026

If you've been wondering what's happening in San Diego's dynamic real estate world, here's the quick take: The San Diego housing market closed out 2025 with median single-family home prices hitting the $1,000,000 mark in December, showing a respectable 2.6% increase compared to December 2024, despite a slight year-over-year dip in sales. This steady growth, according to the latest data from the California Association of REALTORS® (C.A.R.), suggests a market that’s finding its footing, offering glimpses of renewed buyer confidence even with the typical seasonal slowdowns.

San Diego Housing Market Update: What the Latest Data Tells Us

It seems like everyone I talk to, from first-time homebuyers to seasoned investors, is asking the same question: “What's next for San Diego real estate?” Having watched this market closely for years, I've seen its incredible resilience and unique rhythm. While the broader California market saw some price cool-downs, San Diego continues to hold its own, a testament to our desirable lifestyle and strong underlying demand. Let's dig into the specifics from C.A.R.'s December 2025 report and see what's truly shaping our local real estate journey.

Home Prices: Reaching New Heights

For December 2025, the median price for an existing single-family home in San Diego County rose to a significant $1,000,000. This is a 1.0% increase from November 2025's $990,000 and a 2.6% jump from December 2024's $975,000. These numbers tell me that even as California's statewide median price experienced a slight dip both month-over-month and year-over-year, San Diego demonstrated its strength.

What does this mean for you? If you’re a homeowner, your investment has likely appreciated, adding to your equity. For prospective buyers, it underlines the continued premium on owning property here. I often hear people surprised by these figures, but when you consider the consistent demand and attractive qualities of San Diego, it makes perfect sense. Our unique blend of weather, economy, and community keeps property values climbing, even during times when other areas might be wavering.

Home Sales: A Mixed Picture

When we look at home sales in San Diego, December 2025 gave us a bit of a mixed bag, but certainly not a cause for alarm. On a month-over-month basis, sales saw a healthy 7.4% increase. This indicates a seasonal uptick as buyers might have rushed to close deals before the final days of the year, possibly spurred by lower mortgage rates we saw come into play.

However, comparing December 2025 to December 2024, sales dipped slightly by 0.6%. This minor year-over-year decline in sales isn't unique to San Diego; many areas are still adjusting to higher interest rates compared to the ultra-low rates of a few years ago. From my perspective, this isn't a sign of a market slowdown, but rather a rebalancing. It suggests a more thoughtful approach from buyers, taking their time rather than jumping into bidding wars. While the overall California market saw a 2.0% year-over-year increase in sales, San Diego’s slight dip could be attributed to already higher price points and perhaps more discerning buyers.

Housing Supply: A Slight Easing

Understanding the housing supply is key to grasping market dynamics. San Diego’s Unsold Inventory Index (UII), which tells us how long it would take to sell all available homes at the current sales pace, stood at 2.5 months in December 2025. This is down from 3.2 months in November 2025, but slightly up from 2.3 months in December 2024.

Here’s how I interpret that:

• A UII of 2.5 months is still considered a seller's market, as any figure below 5-6 months typically favors sellers.
• The month-to-month decrease in inventory suggests that new listings aren't keeping pace with the sales being made, or that some inventory might have been pulled from the market during the holidays.
• The slight year-over-year increase in UII, however, indicates that homes are staying on the market a little longer than they did a year ago.

Speaking of how long homes stay on the market, the median number of days a single-family home spent on the market in San Diego was 27.0 days in December 2025. This is actually a slight improvement from 28.0 days in November, but it's up from 24.0 days in December 2024. This trend aligns with the statewide median of 36 days on market, indicating that buyers generally have a bit more time to make decisions now than they did a year ago. This really signals a return to a more normalized transaction pace.

Market Trends: Looking Ahead

The big picture, as reported by C.A.R., highlights a statewide market that “ended the year on a high note,” with falling mortgage rates setting the stage for a “more optimistic 2026.” Our San Diego data largely mirrors this positive sentiment.

Here are some key trends I'm seeing and what they might mean for us:

• Mortgage Rates: The 30-year fixed mortgage interest rate averaged 6.19% in December, a significant drop from 6.72% a year prior. Lower rates directly translate to increased buying power, making homeownership more accessible for many. I've already noticed renewed interest from buyers who were previously “priced out” when rates were higher.
• Affordability: While San Diego's prices remain high, relatively lower interest rates mean monthly payments might be more manageable than they were a few months ago. C.A.R. Senior Vice President and Chief Economist Jordan Levine noted that “housing affordability showed some improvement,” which is a positive sign for our local market as well.
• Buyer and Seller Confidence: The modest price gains and stabilizing supply are indicators of a market where both buyers and sellers can feel more confident. Sellers aren't seeing massive appreciation like during the peak pandemic boom, but consistent growth is still valuable. Buyers, on the other hand, are facing less intense competition and slightly more inventory choices.

My take is that San Diego is transitioning from a frenzied seller's market to a more balanced, albeit still competitive, environment. The fundamental demand for housing in our beautiful city isn't going anywhere, but buyers are gaining a bit more leverage. For anyone looking to enter or move within the San Diego housing market, staying informed and working with a knowledgeable local expert is more crucial than ever. The opportunities are there, but they require a strategic approach.

San Diego Housing Market Forecast for Mid-2026

Now, let's dive right in: what's the San Diego housing market forecast looking like? Based on the latest data, it seems we might see a slight dip in home values in the coming months. Experts predict a slight dip in home values in the near future, but a “crash” is unlikely.

The San Diego-Carlsbad average home value is currently $941,517, showing a 1.6% decrease over the past year, with homes going pending in roughly 19 days. Let's dive deeper into what's influencing this forecast and what it could mean for you.

What the Experts are Saying:

Zillow's latest forecasts provide some insights into the coming months:

This suggests a gradual cooling off of the San Diego housing market over the next year, but not a drastic decline.

How Does San Diego Compare?

Let's see how San Diego's housing market forecast stacks up against other major California metros:

As you can see, San Diego's projected decline is similar to other major California cities, suggesting a statewide trend towards slightly lower home values. San Francisco is seeing a more significant projected decline.

Nationwide Trends: What's Happening Across the US?

Lawrence Yun, the Chief Economist for the National Association of Realtors (NAR), is quite optimistic for the future:

• Existing Home Sales: He expects a 6% rise in 2025 and a whopping 11% jump in 2026. That would be a great recovery!
• New Home Sales: Projected to increase by 10% in 2025 and 5% more in 2026. This will help with the low housing supply.
• Median Home Prices: Forecasted to rise by 3% in 2025 and 4% in 2026.
• Mortgage Rates: Expected to average 6.4% in the second half of 2025 and potentially drop to 6.1% in 2026. He calls low mortgage rates the “magic bullet” to increasing market activity.

So, Will Home Prices Crash in San Diego?

Based on the data and expert opinions, a housing market crash in San Diego seems unlikely. While Zillow predicts some moderate price softening in the short term, the overall market seems to be stabilizing. Demand remains relatively high, and experts are predicting positive growth over the long-term. Mortgage rates may come down in the future, which historically has pushed home prices up and made it easier for people to buy houses.

My Take:

I believe the San Diego housing market will likely experience a gentle correction rather than a crash. The area remains highly desirable. If mortgage rates drop as predicted, we could see a resurgence in buyer activity. If you're looking at buying, now might be a good time to get in while prices are slightly down. And for sellers, understanding these trends can help you price your home competitively.

Looking Ahead to 2026

Following the trends outlined by NAR, a reasonable forecast for the San Diego housing market in 2026 would be a period of moderate growth. We could see an increase in home sales and a continued, although slower, rise in median home prices assuming mortgage rates hold steady or decline as predicted. I expect housing inventory to start playing catch up with demand.