If you're wondering about the current San Diego housing market trends, here's the bottom line: It's a mixed bag, with sales slightly down but prices holding relatively steady. While home sales in San Diego are down slightly, home prices have seen a modest increase, suggesting a market that's still competitive but perhaps cooling off a bit.
So, let's dive into what's really going on in the San Diego real estate world. I'll break down the numbers, talk about what's driving these trends, and give you my take on what it all means for buyers and sellers.
San Diego Housing Market Trends: What's Happening Right Now?
Home Sales
Across California, we're seeing some interesting shifts in home sales. According to the California Association of Realtors (C.A.R.) report from April 17, 2025, statewide home sales in March totaled 277,030 on a seasonally adjusted annualized rate. That's down 2.3 percent from February, but up 4.9 percent from March 2024. In San Diego county specifically, home sales were down by 4.0% from March of last year.
What does this mean? It suggests that while the market isn't in freefall, it's not exactly booming either. The slight dip from February indicates that potential buyers might be hesitant, possibly due to economic worries or interest rates (more on that later).
Home Prices
Now, let's talk about the money. The statewide median home price in California hit $884,350 in March 2025. That's a 6.7 percent jump from February and a 3.5 percent increase from March 2024.
Looking specifically at Southern California, the median home price is $877,750, which is a 3.3% increase from last year. But what about San Diego? According to the same report, the median sold price of an existing single-family home in San Diego County in March 2025 was $1,040,000. This is 2% higher than the median price of $1,020,000 in March 2024, but the same as Feb 2025, indicating a potential plateau.
Are Home Prices Dropping?
While the statewide numbers show an increase, the San Diego numbers suggests a plateau. Some regions in California are seeing price drops, but overall, prices are holding steady or experiencing modest growth. The fact that San Diego is trending flat indicates that prices are not dropping for now.
Keep in mind that real estate is local. What's happening in Los Angeles or San Francisco isn't necessarily what's happening in San Diego.
Comparison with Current National Median Price
It's always good to put things in perspective. The current national median home price is $398,400 (as of February 2025), up 3.8% year-over-year. San Diego's median price of $1,040,000 is significantly higher than the national average. This highlights how expensive San Diego is compared to the rest of the country. This can be attributed to many factors like location advantages, employment opportunities etc
Housing Supply
One factor influencing prices is housing supply. The Unsold Inventory Index (UII), which measures how many months it would take to sell all the homes on the market at the current sales rate, was 3.5 months in California in March 2025. That's up from 2.6 months a year ago.
In San Diego, the UII was 3.2 months in March 2025, up from 2.2 months in March 2024. This indicates a slightly larger inventory of homes available, but not by a significant margin.
A balanced market typically has a UII of around 5-6 months. So, we're still leaning towards a seller's market, but the increase in inventory could be giving buyers a little more breathing room.
Is San Diego a Buyer's or Seller's Housing Market?
Based on the data, San Diego is still leaning toward a seller's market, but it's not as strong as it was a year ago. With a UII of 3.2 months, homes are still selling relatively quickly. However, the increased inventory and slower sales pace suggest that buyers have slightly more negotiating power than before.
Market Trends
So, what are the major trends shaping the San Diego housing market?
- Rising Inventory: The number of homes for sale is slowly increasing, giving buyers more choices.
- Stable prices: The year-over-year increases are mild, showing a gentle upward trend.
- Slower Sales: Homes are taking slightly longer to sell compared to last year.
- High Prices: San Diego remains one of the most expensive housing markets in the country.
Impact of High Mortgage Rates
Let's address the elephant in the room: mortgage rates. As of April 2025, the average 30-year fixed mortgage rate is around 6.83%, and the 15-year FRM is about 6.03% (according to Freddie Mac).
High mortgage rates have a significant impact on both buyers and sellers. For buyers, higher rates mean higher monthly payments, which can make homes less affordable. This can lead to fewer people being able to qualify for a mortgage, which can cool down demand.
For sellers, higher rates can mean fewer offers and longer time on the market. This can put downward pressure on prices, especially if inventory continues to rise.
Unlike last year when many were anticipating that mortgage rates would decline, in 2025 the prevailing sentiment is that rates will stay higher for longer. This may impact prospective buyers and sellers as we get into spring. While last year, prospective buyers and sellers anticipating rate declines may have stayed on the sidelines waiting for lower rates, this year, they may make a move earlier as they are not expecting rates to move lower.
Here's a quick recap of the key data points:
Metric | San Diego (March 2025) | California (March 2025) | National (Feb 2025) |
---|---|---|---|
Median Home Price | $1,040,000 | $884,350 | $398,400 |
Year-over-Year Price Change | 2.0% | 3.5% | 3.8% |
Unsold Inventory Index | 3.2 months | 3.5 months | N/A |
My Two Cents
As a real estate professional, here's my take on what's happening in San Diego. The market is definitely shifting. The days of homes selling for way over asking price in a bidding war are becoming less common.
Buyers have a little more power now, but it's still a competitive market. If you're looking to buy, it's important to be patient, do your research, and work with a knowledgeable agent who can help you negotiate.
If you're a seller, it's important to price your home realistically and make sure it's in top condition. Don't expect to get the same prices that homes were fetching a year or two ago.
Looking Ahead
Predicting the future is always tough, but here's what I expect to see in the San Diego housing market in the coming months:
- Inventory will continue to rise, giving buyers more choices.
- Prices will likely remain stable, with maybe some minor fluctuations.
- Mortgage rates will remain the biggest wild card. If rates start to fall, we could see a surge in demand.
Ultimately, the San Diego housing market is still a good long-term investment. The city is a desirable place to live, and demand for housing will likely remain strong. But it's important to be informed and realistic about the current market conditions.
San Diego Housing Market Forecast 2025: What's Next for Home Prices?
Thinking about buying or selling in San Diego? You're probably wondering about the San Diego housing market forecast. While prices are currently high, forecasts suggest a period of relative stability with modest gains, indicating no major crash is expected in the near term. Let's dive into the details and what I think it all means for you.
San Diego-Carlsbad Housing Forecast
Reflects current market demand as of February 2025.
Homes are selling in around 23 days on average.
Active listings available as of February 2025.
New listings added in February 2025.
Sales price data as of February 2025.
Expected growth from February 2024 to February 2025.
“The San Diego-Carlsbad housing market remains strong, with increasing home values and steady demand as we look ahead.”
First, let's get a sense of where we are right now. As of today, the average home value in San Diego-Carlsbad is around $948,441. That's a 3.5% increase over the past year (Zillow Data). The market is still moving relatively quickly, with homes going to pending status in approximately 23 days. That shows there's still demand, although perhaps not the frenzy we saw a few years ago.
What the Experts are Saying: The Forecast
Okay, so what about the future? I've been keeping a close eye on forecasts, and Zillow is a credible source I often turn to. Here's a breakdown of their latest predictions for the San Diego area, released in February 2025. I've renamed the columns for better clarity:
Region | State | Forecast for March 2025 | Forecast for May 2025 | One-Year Forecast (Feb 2025 – Feb 2026) |
---|---|---|---|---|
San Diego, CA | CA | -0.1% | 0.2% | 1.7% |
Los Angeles, CA | CA | -0.2% | -0.1% | 0.4% |
San Francisco, CA | CA | 0% | 0.1% | -2.1% |
Riverside, CA | CA | 0% | 0.5% | 1.7% |
Sacramento, CA | CA | -0.1% | 0.1% | -0.7% |
San Jose, CA | CA | -0.8% | -2.7% | -2.9% |
Fresno, CA | CA | 0.1% | 0.5% | 1% |
Bakersfield, CA | CA | 0.2% | 0.9% | 2.3% |
- Short-Term (March & May 2025): These numbers suggest a very slight dip followed by a minor rebound. We're talking fractions of a percent, so don't expect any huge shifts.
- One-Year (Feb 2025 – Feb 2026): Zillow predicts a modest 1.7% increase in home values over the next year. This is a slower pace than we've seen in recent years, indicating a cooling but still appreciating market.
San Diego Compared to Other California Cities
Looking at the table above, you can see that San Diego's forecasted growth of 1.7% is pretty much in the middle of the pack for major California cities. Places like San Jose and San Francisco are expected to see declines, while Bakersfield is predicted to have stronger growth. This suggests that San Diego's housing market is relatively stable compared to some other parts of the state.
Will Home Prices Drop in San Diego? Will it Crash?
Based on these forecasts and my own experience, I don't foresee a major price drop or a housing market crash in San Diego in the near future. The data suggests a gradual and manageable growth trajectory. Of course, unforeseen economic events could always change the picture, but as of now, the signs point to a stable market.
My Thoughts and Predictions for 2026
Predicting beyond a year is always tricky, but here's my take on what might happen in 2026:
- Continued Moderate Growth: Assuming interest rates stabilize or even decrease slightly, I expect the San Diego housing market to continue its slow and steady appreciation. We might see growth in the low single digits, perhaps around 2-3%.
- Inventory Will Be Important: The biggest factor influencing prices will be inventory. If more homes come onto the market, it could temper price increases. If inventory remains low, prices could climb a bit faster.
- Location, Location, Location: As always, some neighborhoods will perform better than others. Desirable areas with good schools and amenities will likely see stronger demand and price appreciation.
Why is Housing So Expensive in San Diego?
San Diego's allure is undeniable. Pristine beaches, perfect weather, and a vibrant city life make it a dream destination for many. But this paradise comes at a price, particularly when it comes to real estate. Let's delve into the factors driving San Diego's expensive housing market:
Limited Supply, High Demand
- Geography: Nestled between the Pacific Ocean and mountains, San Diego has limited developable land. This scarcity creates a competitive seller's market, pushing prices upwards.
- Desirable Location: San Diego's climate, job opportunities, and outdoor activities attract residents and retirees alike, placing constant pressure on a finite housing stock.
Economic Factors
- Strong Local Economy: San Diego boasts a diverse and thriving economy, fueled by a strong tourism industry, a growing tech sector, and a robust military presence. The economy grew in 2021, adding over $11 billion to its gross regional product (GRP) compared to pre-pandemic levels. In 2022, the San Diego metro area's real gross domestic product (GDP) was $257.34 billion, a significant increase from the previous year's $250.06 billion. According to the UCLA Anderson March Economic Outlook, San Diego County is expected to grow 2.7% in 2023. This economic strength translates to job growth and attracts professionals with higher salaries who can afford premium housing.
- Low Interest Rates (Historically): Over the past decade, interest rates have hovered near historic lows. This has significantly reduced the monthly mortgage payment for a fixed-rate loan, making homeownership more affordable for many buyers. For example, in 2016, the average 30-year fixed mortgage rate was around 3.5%. By 2 2021, that number had dipped below 3%, making it significantly cheaper to finance a home purchase. This easy access to cheap credit fueled a surge in buyer demand, which in turn drove up housing prices. While interest rates have risen in 2024, they remain historically affordable compared to long-term averages. However, even with slightly higher rates, the overall impact on affordability is mitigated by wage growth and a strong local economy.
Regulations and Taxes
- Development Restrictions: San Diego, like many coastal cities in California, faces challenges in balancing growth with environmental protection. Strict zoning regulations, lengthy permitting processes, and environmental impact reviews can significantly slow down or even halt new housing developments. This can stifle the ability to increase housing supply to meet the growing demand, putting upward pressure on prices. Additionally, citizen groups and environmental concerns can further complicate the development process. While these regulations are important for safeguarding the natural beauty and character of San Diego, they can also contribute to the limited housing inventory and high costs.
- Property Taxes: California has relatively high property taxes, with an average effective rate of 0.73% in 2023 according to the California Tax Foundation. This means that for a home valued at $1 million, the annual property tax bill would be around $7,300. High property taxes can impact affordability, particularly for first-time homebuyers or those on fixed incomes. However, these taxes also contribute to the overall perceived value of San Diego real estate. Property taxes are a major source of revenue for local governments, which use these funds to finance essential services like schools, roads, and public safety. Additionally, high property taxes can discourage speculation and absentee ownership, potentially leading to a more stable housing market.
National Trends
Nationwide Housing Market: While San Diego stands out, it's part of a larger national trend of rising housing costs. Investor activity and a national shortage of affordable housing contribute to the overall market dynamic.
The “Sunshine Tax”
San Diegans often jokingly refer to the high cost of living as the “sunshine tax.” While it might be a sardonic term, it reflects the reality that many people are willing to pay a premium to live in such a desirable location with a high quality of life.
How is the Rental Housing Market Doing in San Diego?
The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes.
The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.
Renters vs. Owners in San Diego
San Diego's property rental market is influenced by several factors, including the local economy, job opportunities, and the overall demand for housing. It's a city known for its mix of urban and suburban neighborhoods, each with its own rental and ownership dynamics.
San Diego had a diverse housing landscape with a mix of renters and property owners.
- Renters: San Diego has a significant population of renters, comprising individuals and families who lease residential properties. This includes apartments, condominiums, townhouses, and single-family homes. The exact percentage of renters relative to property owners can vary by neighborhood and demographic factors.
- Owners: San Diego also has a substantial number of property owners. These are individuals or entities who own residential properties and may either live in their properties or lease them out to renters. Property owners contribute to the diversity of the city's housing options.
Size of the Rental Market
The size of the San Diego property rental market is substantial, with a wide range of rental properties available to residents. This market includes apartments, houses, and various types of housing units. The exact size of the rental market can fluctuate based on factors like population growth, economic conditions, and housing development trends.
Real estate agencies, rental platforms, and government agencies often track and report on the status of the rental market, offering detailed insights into its size and dynamics.
For the most up-to-date and specific information regarding the current state of the San Diego property rental market, including the number of renters and property owners, it's recommended to refer to the latest reports and data from sources like local real estate associations, government housing agencies, and real estate websites.
San Diego's property rental market is an essential component of the city's real estate landscape, offering a wide range of housing options to its diverse population.
San Diego Apartment Rent Prices
As of December 2024, the median rent for all bedroom counts and property types in San Diego, CA is $2,900. This is +53% higher than the national average.
The monthly rent for an apartment in San Diego, CA is $2,695. A 1-bedroom apartment in San Diego, CA costs about $2,460 on average, while a 2-bedroom apartment is $3,321. Houses for rent in San Diego, CA are more expensive, with an average monthly cost of $4,000.
Rent prices for all bedroom counts and property types in San Diego, CA have decreased by 3% in the last month and have increased by 2% in the last year.
Housing Units and Occupancy
In terms of occupied housing units, San Diego has the following distribution:
- Renter-occupied Households: Renter-occupied households make up 53% of the housing units in San Diego, indicating a significant presence of renters in the city.
- Owner-occupied Households: Owner-occupied households account for 48% of the housing units, highlighting a balanced mix of homeowners in the area.
Affordable and Expensive Neighborhoods
San Diego's neighborhoods offer a range of rental prices, making it accessible for various budgets:
The Most Affordable Neighborhoods:
- Bay Park: The average rent in Bay Park is $2,135 per month.
- University Heights: In University Heights, the average rent is around $2,200 per month.
- North Park: North Park offers an average rent of approximately $2,273 per month.
The Most Expensive Neighborhoods:
- Carmel Valley: Carmel Valley is one of the more expensive neighborhoods, with an average rent of $2,942 per month.
- Mission Valley East: In Mission Valley East, the average rent can go for $2,894 per month.
- Mission Beach: Mission Beach has an average rent of $2,850 per month.
Popular Neighborhoods
Some neighborhoods in San Diego are particularly popular among renters:
- Mission Beach: Mission Beach tops the list with 1,115 listings, making it a sought-after area for renters.
- Pacific Beach: Pacific Beach is also a popular choice, offering 760 listings for prospective renters.
- Ocean Beach: Ocean Beach features 295 places for rent, making it a vibrant neighborhood for renters.
These insights provide a snapshot of the current rental market in San Diego. Rental prices have seen some fluctuations in recent months, with variations in different apartment types. The city offers a range of neighborhoods to suit different budgets and preferences, with a balanced mix of renters and homeowners.
Recommended Read:
- Is San Diego’s Housing Getting Very Expensive: Experts Predict
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- San Diego Housing Market Predictions: Prices Skyrocket 11.4%; What's Next?
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