San Diego Housing Market as We End 2025: A Complete Analysis of What Buyers and Sellers Need to Know

The San Diego housing market is closing out 2025 with a story of resilience, adaptation, and measured optimism. While the frenzy of 2020-2022 has cooled considerably, the market remains fundamentally strong, supported by limited inventory and enduring demand for America's Finest City. Whether you're a prospective buyer, current homeowner, or seller considering your options, understanding where we stand today is critical for making informed decisions as we head into 2026.

The Numbers Tell the Story: Key Market Statistics

As of October 2025, San Diego's housing market shows distinct patterns that reveal both challenges and opportunities. The median home sale price sits at approximately $937,000, representing a modest 0.64% decline compared to last year—a far cry from the double-digit appreciation we saw during the pandemic years. Single-family detached homes command a median price of $1,020,500, while attached homes like condos and townhomes average $690,000.

Homes are taking longer to sell than in recent memory. The average days on market has increased to 35 days countywide, up from just 25 days a year ago. This represents a significant shift from the spring of 2022 when properties routinely went under contract within days of listing. The slower pace indicates a more balanced market where buyers have time to conduct due diligence rather than competing in frantic bidding wars.

Sales volume tells an interesting story of market normalization. In September 2025, 840 homes sold—up from 774 the previous year. However, when we zoom out to look at the full year, sales volume remains approximately 30% below pre-pandemic 2019 levels. This reflects both the inventory constraints that continue to plague the market and the impact of elevated mortgage rates on buyer purchasing power.

Mission Beach Boardwalk

The Positive Developments: Reasons for Optimism

Despite the headlines focusing on challenges, several positive trends are emerging that benefit both buyers and sellers. First and most significantly, inventory is finally increasing. Active listings have risen by 39% compared to early 2025, with detached home inventory up 25.6% and attached homes showing an even more dramatic 49.8% increase year-over-year. While still below the 5-6 months of supply that characterizes a balanced market, we're currently at approximately 3.3 months—a meaningful improvement.

This inventory growth creates opportunities for buyers who've been frustrated by limited choices. More options mean less pressure to make rushed decisions and more negotiating leverage. In fact, 49% of homes in San Diego County are now selling below their original asking price, compared to the height of the market when homes routinely sold above list price. This doesn't signal distress—rather, it reflects a return to more normal market dynamics where pricing strategy matters.

For sellers, the news remains encouraging despite the moderation. Homes are still selling, and those priced correctly are moving efficiently. The median sale-to-list price ratio hovers around 99-100%, meaning sellers are still achieving close to their asking prices. Properties in prime locations—particularly coastal areas, top-rated school districts, and newer developments—continue to attract strong buyer interest and multiple offers. The key is realistic pricing based on recent comparable sales rather than peak 2022 valuations.

San Diego's fundamental appeal remains intact. The region gained population in 2024-2025, even as California overall saw net out-migration. Buyers continue arriving from Los Angeles, the Bay Area, and out-of-state markets like Texas, Arizona, and Washington. The tech sector's continued strength, with 10,000+ annual tech migrants, supports demand for higher-priced properties. The region's 400+ biotech companies, robust military presence, and world-class lifestyle amenities ensure steady underlying demand.

The Challenges: What's Working Against the Market

The primary headwind facing San Diego's housing market remains affordability. With median home prices near $940,000 and mortgage rates hovering around 6.5-6.6% for 30-year fixed loans, the monthly payment on a median-priced home exceeds $6,000 including taxes and insurance. This places homeownership out of reach for many first-time buyers and move-up purchasers, particularly those locked into low pandemic-era rates below 3%.

The "rate lock" effect continues to constrain inventory. Current homeowners with 2-3% mortgages face a difficult decision: sell and accept a mortgage rate that's more than double their current rate, or stay put. This dynamic has reduced turnover dramatically, keeping potential listings off the market. While inventory is improving, the rate of improvement remains slower than historical norms would suggest given the current price levels.

Economic uncertainty adds complexity to the equation. Trade tensions and tariff concerns that emerged in 2025 have created business uncertainty, particularly affecting the international trade that flows through San Diego's border with Mexico. Some analysts predict these pressures could push home prices down modestly through 2026-2027 before stabilizing. While San Diego is not expected to experience a crash, some correction in pricing appears possible, particularly in overheated segments.

The homeownership rate in San Diego County has declined to 51.7%, down from the peak of 55.3% in 2006. This reflects not just affordability challenges but a broader trend toward renting, particularly among younger demographics. The median rent for all property types in San Diego is $2,800—44% higher than the national average—which creates its own affordability crisis while also limiting the path to homeownership through savings.

Geographic disparities within San Diego County are becoming more pronounced. While coastal communities like La Jolla, Del Mar, and Coronado remain exceptionally tight with luxury homes seeing 8.5% annual appreciation, more affordable inland areas are experiencing softer demand. Markets in East County and South Bay have shown more significant price adjustments and longer days on market. This bifurcation means that "the San Diego market" is really dozens of distinct submarkets behaving differently.

What This Means for Buyers

For buyers, late 2025 presents the best opportunity in years—with some important caveats. The increased inventory and longer days on market mean less competition and more room for negotiation. You're no longer forced to waive contingencies or write offers sight unseen. Take time to conduct proper inspections, review disclosures thoroughly, and negotiate repairs or price reductions where appropriate.

Focus on properties that have been listed for 30+ days. These sellers may be more motivated to negotiate on price or contribute to closing costs. In the current market, 36-44% of listings have already had price reductions—a clear signal that sellers are adjusting expectations. Your offer doesn't need to be your best and final immediately; there's room for traditional back-and-forth negotiation.

Consider expanding your geographic search. While everyone wants to live in La Jolla or Carlsbad, areas like Poway, Vista, San Marcos, Chula Vista, and parts of East County offer significantly better value. These communities often feature newer construction, good schools, and easy freeway access—just with longer commutes to coastal jobs. The tradeoff in commute time can translate to $200,000-$400,000 in purchase price savings.

Get fully pre-approved (not just pre-qualified) before house hunting. In a market where buyers still outnumber listings in desirable areas, a solid pre-approval from a reputable lender distinguishes serious buyers from tire-kickers. Consider exploring different loan products—FHA, VA, conventional, or even adjustable-rate mortgages (ARMs) if rates decline in the coming years.

What This Means for Sellers

Sellers need to adjust their mindset from the seller's paradise of 2020-2022 to today's more balanced conditions. The days of listing your home and receiving multiple over-asking offers within 48 hours are largely behind us—at least in most price points and neighborhoods. However, this doesn't mean it's a bad time to sell; it simply means strategy matters more than ever.

Pricing is absolutely critical. Work with your agent to price your home based on the most recent comparable sales (ideally within 60 days), not what your neighbor got in 2022. Overpricing leads to your home sitting on market, which creates negative perception and forces eventual price reductions that buyers see. Properties priced right from day one are selling within 2-4 weeks at or near asking price.

Presentation matters exponentially more in today's market. Professional photography, staging (even if just refreshing paint and decluttering), and making obvious repairs before listing pays dividends. Buyers have options and time to be choosy, so homes that show well stand out. Consider a pre-listing inspection to identify issues before buyers do—this demonstrates transparency and prevents surprises during negotiations.

Timing your listing strategically can improve results. Spring (March-June) remains the strongest selling season, but September-October can work well for motivated buyers trying to close before year-end. Avoid listing during major holidays or summer vacation season unless necessary. Your agent should analyze hyperlocal market trends to identify the optimal listing window for your specific neighborhood.

Be prepared to negotiate. Unlike 2021-2022, buyers are now asking for inspection repairs, credits, and rate buy-downs. Decide in advance what you're willing to compromise on and what's non-negotiable. Being responsive and reasonable in negotiations keeps transactions moving forward rather than losing buyers to other opportunities.

Looking Ahead: What to Expect in 2026

Most forecasters predict modest price appreciation for San Diego in 2026—likely in the 3-5% range—assuming mortgage rates stabilize or decline modestly. This represents healthy, sustainable growth rather than the unsustainable run-ups of recent years. Sales volume should increase slightly if rates do drift lower, potentially unlocking some of the pent-up move-up buyer demand.

Inventory will likely continue increasing gradually as sellers who've been waiting for "the right time" recognize that rates may not return to 3% anytime soon. This should create better balance between buyers and sellers, with neither side having overwhelming leverage. The result will be a more traditional market where smart strategy and preparation matter more than timing luck.

Areas to watch include developments around new transit lines, which could see 15-20% property value increases. The 18,000+ new homes planned in master-planned communities will help moderate price growth while creating opportunities for buyers seeking newer construction. The continued tech and biotech sector growth should support demand in North County Coastal and central San Diego neighborhoods.

The wild cards for 2026 include the trajectory of inflation and Federal Reserve policy, the resolution of trade tensions, and potential changes to mortgage lending standards. Additionally, California's housing affordability crisis continues to drive policy discussions about zoning reform and increased density—changes that could eventually reshape San Diego's housing landscape.

The Bottom Line

San Diego's housing market as we close 2025 is neither booming nor crashing—it's normalizing. After years of pandemic-driven volatility, we're settling into a more predictable pattern where fundamentals matter. Buyers have more opportunities and negotiating power than they've had in five years. Sellers can still achieve strong prices, but only with proper pricing and presentation.

The key for both buyers and sellers is working with experienced local professionals who understand current conditions and can help you navigate the specific dynamics of your target neighborhood. San Diego remains one of America's most desirable housing markets, but success now requires strategy, patience, and realistic expectations. Those who adapt to the new normal will find opportunities; those expecting 2021 to return will likely be disappointed.

Whether you're looking to buy your first home, move up to a larger property, or sell to capitalize on equity, the San Diego market offers paths forward. The question isn't whether it's a good time—it's whether you're prepared with the right strategy for today's conditions.

Statistics compiled from Greater San Diego Association of REALTORS, Redfin, Zillow, and local MLS data as of October 2025. Market conditions vary by neighborhood and price point. Consult with a licensed real estate professional for guidance specific to your situation.