San Diego Real Estate Market 2025

The San Diego Squeeze: A Real Estate Market Defined by Scarcity and Selectivity

The residential real estate market in San Diego County is currently navigating a period of gentle recalibration as we close out 2025. It is no longer the hyper-heated, frenzied environment of the pandemic boom years, but it is far from a buyer’s paradise. The market remains characterized by incredibly high median prices, stubbornly low inventory, and a growing sense of buyer selectivity driven by high mortgage rates.

Here is an analysis of the key trends defining the current state of the San Diego housing market.

Price Resilience: The High Cost of the California Dream

Despite the significant pressures from elevated mortgage rates, San Diego home values are demonstrating remarkable resilience, maintaining their position as one of the most expensive markets in the nation.

Median Price Points (Approximate as of Late 2025):
- Detached Single-Family Homes: Median Sale Price is typically settling above $1.0 million, with some reports placing it as high as $1.075 million or more.
- Attached Homes (Condos/Townhomes): Median Sale Price is generally hovering around $650,000 to $699,000.
Price Movement: While the annual double-digit price increases have faded, most forecasts suggest continued modest price appreciation (around 2–4% annually) through 2026. Price stability is a testament to the chronic supply shortage and the continued desirability of the region.

Sales Volume vs. Inventory: A Market Slowdown, Not a Crash

The most significant change in the market is the slowdown in activity, which is causing inventory to rise from historical lows.

Sales Volume: Sales activity is notably suppressed, holding well below pre-pandemic levels. The double whammy of high prices and high mortgage rates has sidelined many potential buyers, especially first-time and entry-level purchasers. Overall sales volume is trending flat or slightly down year-to-date.
Inventory Growth: Inventory is gradually increasing year-over-year, offering buyers more choices than in previous years. However, the overall Months of Supply remains critically low, typically registering at 3.2 months or less county-wide. A balanced market requires 6–7 months, meaning San Diego remains a seller’s market, albeit a less aggressive one.
- Micro-Trend: Inventory growth is often more pronounced in the attached housing sector (condos/townhomes) and in the less coastal, inland ZIP codes.

The Buyer Shift: Time and Negotiation Return

The days of bidding wars on every property are largely over. Buyers now have the space to be more methodical and demanding.

Days on Market (DOM): The median time a home spends on the market has increased significantly year-over-year. While prime, well-priced homes still sell quickly (often under 30 days), the overall average DOM is extending to 40 days or more in some segments.
Negotiation Power: Buyers are regaining some leverage. Homes are selling for less of their Original List Price Received (often around 96–98%), and a higher percentage of listings are seeing price drops. This indicates that sellers must be strategic and realistic with their pricing from day one to attract offers.

Conclusion: A Selective and Sustainable Pace

The current San Diego real estate market can be defined as stable yet strenuous. The high median price and low inventory maintain the seller’s advantage, while high interest rates and increased DOM allow for greater buyer selectivity and negotiation.

Buyers entering the market now are seeking value and utility and are less likely to overpay. Sellers must focus on strategic pricing and presentation. For the long term, San Diego’s inherent desirability, coupled with the persistent regional housing deficit, suggests that while the pace may be slower, significant price crashes are highly unlikely.