The San Diego housing market has been through a lot over the past few years. Prices went up fast, then things slowed down. Buyers got excited, then cautious. Sellers had the upper hand, then the balance started to shift.

If you’re thinking about buying or selling a home in San Diego, it’s important to understand what’s really going on.

Let’s break it all down in a simple way so you can feel confident making your next move.

The Market Is Slowing Down

After years of fast growth, the housing market is starting to slow down.

This doesn’t mean the market is crashing. It just means things are becoming more balanced.

During the pandemic, home prices went up very quickly. Mortgage rates were low, which made it easier for buyers to afford homes. At the same time, there were not many homes for sale. This pushed prices even higher.

Now, things are changing.

Mortgage rates have gone up. Buyers are more careful. And more homes are coming on the market.

Because of this, home sales are slowing down.

In fact, San Diego has far fewer home sales today compared to the past. For example, in 2019 there were about 35,700 home sales. In 2025, there were only about 23,900.

That’s a big drop.

Why Fewer Homes Are Selling

There are a few key reasons why fewer homes are selling right now.

1. Higher Mortgage Rates

When interest rates go up, monthly payments go up too. This makes homes less affordable.

Many buyers are choosing to wait instead of rushing into a purchase.

2. High Home Prices

Even though prices may start to level off, they are still much higher than they were a few years ago.

This makes it harder for first-time buyers to enter the market.

3. Uncertainty in the Economy

People feel unsure about the future. When that happens, they tend to hold off on big decisions like buying a home.

Inventory Is Finally Going Up

For a long time, there were very few homes available.

That created a strong seller’s market where buyers had to compete.

Now, more homes are coming on the market.

In early 2026, there were about 6,400 homes for sale in San Diego County. That’s slightly higher than the year before.

This increase may not seem huge, but it’s important.

More inventory means buyers have more choices.

And when buyers have more choices, sellers need to be more competitive.

What This Means for Sellers

If you’re thinking about selling your home, this shift matters.

Here’s what you need to know:

Pricing Matters More Than Ever

You can’t just price high and hope buyers show up.

Today’s buyers are smart. They compare homes carefully. If your home is overpriced, they will skip it.

Homes May Take Longer to Sell

In the past, homes sold quickly. Sometimes within days.

Now, homes may sit on the market longer.

That’s normal in a changing market.

Presentation Is Key

Buyers are picky right now. They want homes that feel move-in ready.

Clean, staged, and well-marketed homes still stand out.

What This Means for Buyers

If you’re a buyer, this market may actually work in your favor.

More Options

You don’t have to rush as much as before. There are more homes to choose from.

Less Competition

You may not face as many bidding wars.

Negotiation Opportunities

Sellers may be more open to negotiating price, repairs, or credits.

That said, interest rates are still a big factor. Even if prices soften, higher rates can impact your monthly payment.

Why People Aren’t Moving as Much

Another big factor in the market is something called “turnover.”

Turnover means how often people move.

Right now, fewer people are moving.

In 2024, only about 5.5% of homeowners moved.

That’s lower than in past years.

Why?

People Are Locked Into Low Rates

Many homeowners have low mortgage rates from a few years ago.

If they sell and buy a new home, they may have to take on a much higher rate.

So they stay put.

Moving Feels Risky

With uncertainty in the economy, people are more cautious.

They don’t want to make a move unless they have to.

Homeownership Is Dropping

Another trend is that fewer people own homes.

In 2025, about 52.3% of people in San Diego owned their homes.

That’s lower than before.

Why Is This Happening?

• Homes are expensive
• Mortgage rates are higher
• It’s harder to qualify for loans

Because of this, many people are choosing to rent instead.

What’s Happening With Home Prices

Home prices are not rising the way they used to.

In early 2026, prices were mostly flat compared to the year before.

That means:

• Prices are not dropping sharply
• But they are not rising quickly either

There may still be small seasonal changes.

For example, prices often go up slightly in the spring when more buyers are active.

But overall, the trend is slower growth.

Could Prices Go Down?

Yes, it’s possible.

As inventory rises and buyers stay cautious, prices may soften.

Experts believe prices could continue adjusting over the next couple of years.

The market may not fully recover until around 2027 or 2028.

New Construction Is Changing

Builders are also adjusting to the market.

Right now:

• Single-family home construction is flat
• Multi-family construction (like apartments) is growing

This shift makes sense.

More people are renting, so there is more demand for rental housing.

Jobs and the Housing Market

Jobs play a big role in real estate.

When people have stable jobs and good income, they are more likely to buy homes.

In San Diego, job growth has been steady but slow.

By the end of 2025, there were about 1.58 million jobs in the county.

That’s slightly higher than the year before.

However, job growth may slow down in 2026.

If job growth slows, housing demand may also slow.

Income and Affordability

Income affects how much people can afford.

In San Diego, the average income was about $79,100 as of the most recent data.

That sounds good, but housing costs are still very high.

This gap between income and home prices makes it harder for people to buy homes.

The Big Picture: A Market Reset

What we’re seeing now is a market reset.

The fast growth from 2020 and 2021 is behind us.

The market is finding a new balance.

Here’s what that looks like:

• Slower sales
• More homes for sale
• More cautious buyers
• More realistic pricing

This is not a bad thing.

It’s actually a healthier market.

What to Expect in the Next Few Years

Looking ahead, here’s what may happen:

2026

• Continued slowing
• More inventory
• Stable or slightly lower prices

2027–2028

• Market begins to recover
• Buyers return with confidence
• Prices stabilize and begin to rise again

This is a normal cycle in real estate.

What Should You Do Right Now?

Your next move depends on your situation.

If You’re Selling

• Price your home correctly
• Invest in presentation and marketing
• Be prepared for longer timelines

If You’re Buying

• Take advantage of less competition
• Negotiate when possible
• Focus on long-term value

Final Thoughts

The San Diego housing market is not crashing.

It is changing.

After years of extreme growth, things are becoming more balanced.

This creates opportunities for both buyers and sellers.

The key is understanding the market and making smart decisions based on your goals.

If you stay informed and work with the right strategy, you can succeed in any market.