What the San Diego Housing Market Might Be Like in 2025 – 2026

In 2025, the San Diego metro area real estate market is expected to remain competitive for home buyers due to an ongoing imbalance between supply and demand.

Here are five things you should know right off the bat:

1. Home prices rose during 2024 and will likely do the same in 2025.
2. Inventory has increased a bit, giving home buyers more choices.
3. But inventory remains low overall, giving sellers more leverage.
4. Low supply levels and affordability are the biggest challenges for buyers.
5. Mortgage rates could ease a bit in 2025, improving affordability.

Summary: This report provides an update on San Diego real estate market conditions at the start of 2025, with a forecast extending into early 2026.

Update on Home Prices at the Start of 2025

This report covers all of the San Diego metro area, including the cities of San Diego, Chula Vista, Oceanside, Escondido, Carlsbad, El Cajon, Vista, San Marcos, Encinitas, and others.

The table below shows the median home value for all cities in San Diego County. These figures were obtained from Zillow at the start of 2025.

City	Median Home Price
San Diego	$1,010,255
Chula Vista	$848,926
Oceanside	$873,085
Escondido	$848,127
Carlsbad	$1,492,442
El Cajon	$820,624
Vista	$872,526
San Marcos	$961,979
Encinitas	$1,822,748
La Mesa	$886,767
Santee	$809,963
National City	$685,285
Poway	$1,223,175
Lemon Grove	$757,592
Imperial Beach	$852,725
Coronado	$2,379,863
Solana Beach	$2,103,506
Del Mar	$3,544,906

We update this table quarterly using the latest data. And while these numbers could be slightly dated when you read this report, they still help with affordability comparisons.

Key points to take away from these numbers:

• The median home price for the San Diego-Carlsbad metro area is $939,174.
• Del Mar is the most expensive city, with a median price north of $3,500,000.
• National City is the cheapest market, with a median price below $700,000.

Home prices in all of these cities rose during 2024, with year-over-year gains ranging from 0.3% to 6.6%, according to Zillow.

The following five cities experienced the most price growth in 2024:

1. Poway: +6.6%
2. Lemon Grove: +5.8%
3. Carlsbad: +5.8%
4. Oceanside: +5.0%
5. Vista: +4.9%

As for the near future, forecasts suggest the San Diego real estate market could experience additional price growth in 2025. So let’s look at those predictions.

A Pair of Positive Forecasts

Multiple forecasts suggest that home prices in San Diego could rise throughout 2025, as they did during the previous year. But those projections vary widely.

• Zillow recently predicted that the median home value for the San Diego-Carlsbad metro area would rise by 2.5% from November 2024 to November 2025.
• Realtor.com issued a bolder forecast, predicting that San Diego-area home prices would rise by a whopping 9% during 2025.

We lean toward the more conservative estimate. After a year of 4% growth in 2024, it’s hard to imagine a scenario where prices would rise by more than double that amount in 2025.

Additionally, home values in this market flattened out at the end of 2024. So we will probably enter 2025 with little to no price movement. Modest price gains seem likely during 2025.

The takeaway: Economists and housing analysts believe that the San Diego real estate market will continue to appreciate over the coming months.

San Diego Housing Market FAQs

The Home Buying Institute regularly receives questions from home buyers relating to local real estate market conditions.

Below, we have compiled some of the most common questions people ask about the San Diego housing market in particular. We update these questions quarterly with the latest data.

1. Are San Diego housing prices dropping?

At the start of 2025, the median home value for San Diego appeared to be flattening out after a period of steady growth. This pattern has occurred in most cities across the metro area, to varying degrees.

Thus far, however, we see no signs that home prices in San Diego will start dropping in 2025, and the latest forecasts actually suggest the opposite.

2. What’s the general market outlook for 2025?

In 2025, the San Diego real estate market will likely continue along the same trajectory we saw during the previous year. This includes modest price growth, steady home sales, and limited inventory across most cities.

Home sales data from 2024 suggest there is still plenty of demand in this market. According to the California Association of Realtors, San Diego County home sales increased by 18% from November 2023 to November 2024. So clearly, buyers remain active in this market.

The most likely scenario is that home prices will start to rise gradually during the first quarter of 2025, with modest growth throughout the year. Inventory levels will probably remain the same, though we could see some more listings come onto the scene if mortgage rates drop.

As for 2026, the San Diego real estate market will likely experience moderate price growth and steady demand, though a lack of affordability could limit both of those things.

3. Is it more of a buyer’s or seller’s market right now?

It’s currently more of a seller’s market in San Diego County, as of January 2025. Low inventory levels have created a situation where there are more buyers in the market than there are properties. We expect this dynamic to continue through 2025 and possibly into 2026.

However, it’s not a strong seller’s market like we saw during the pandemic years. Home buyers in the San Diego metro area currently have a bit more negotiating leverage than they had back then. But sellers still hold most of the cards.

Anyone planning to buy a home in this market during 2025 should understand this dynamic.

4. Is 2025 a good time to buy a home in San Diego?

This will depend on your individual circumstances more so than market conditions.

Home buyers should consider their employment and income stability, lifestyle preferences, and long-range plans before making a purchase.

But purely from a market standpoint, 2025 could be a good time to buy a home, especially if mortgage rates decline a bit further as expected.

Aside from the Great Recession of 2008 (when home prices dropped in nearly every city in the U.S.), San Diego-area home values have had a long history of steady price growth. This makes it a strong real estate market when it comes to long-term investment, equity growth, and resale potential.

Again, however, home buyers should consider their personal financial situation before buying a house, in addition to these market-related factors.

5. Is it cheaper to buy a home or rent in this market?

Month to month, renting is the more affordable housing option in San Diego, and by a pretty wide margin. This statement applies to most of Southern California for that matter, and much of the U.S. as well.

In San Diego, the average homeowner might spend two to three thousand dollars more per month than the average renter spends. This makes renting the more affordable option in nearly all situations.

San Diego is one of those pricey real estate markets where people buy homes for the independence, flexibility, and long-term investment potential, rather than month-to-month affordability.

Disclaimer: This report contains forecasts and predictions relating to the San Diego housing market through 2025 and into 2026. Such forward-looking views are the equivalent of an educated guess. The Home Buying Institute makes no claims about future real estate trends.

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Keep Up With San Diego Real Estate Trends

Do you have a professional or vested interest in the San Diego real estate market, or Southern California as a whole?

If so, you should subscribe to our informative newsletter, SoCal Housing Weekly.

Authored by veteran housing analyst Brandon Cornett, this newsletter delivers a steady stream of housing market news for the Southern California region. We also provide detailed reports for the major metros, including Los Angeles, San Diego, and the Inland Empire.

SoCal Housing Weekly gives you an easy way to keep up with the local real estate market. It delivers useful information and exclusive data, from a trusted source.

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About the San Diego-Carlsbad Metro Area

We created the following guide for home buyers who are new to the San Diego metro area, as well as those who plan to move there in the near future.

• Designation: San Diego-Carlsbad, CA Metropolitan Statistical Area (MSA)
• Major Cities: San Diego, Chula Vista, Carlsbad, Oceanside, Escondido
• Population: About 3.3 million residents across the metro area, as of 2024

San Diego is the second-largest metropolitan area in California, after Los Angeles, and the eighth-largest in the United States.

As for its geography, the San Diego area stands out for several reasons. It includes everything from coastline to mountains to the Anza-Borrego Desert. Its borders include the Pacific Ocean to the west, Mexico to the south, and inland mountain ranges to the east.

Economy

San Diego’s economy is driven by a broad range of industries. These include biotechnology, healthcare, tourism, defense, and telecommunications. The presence of major research institutions and military installations contributes to the region’s economic vitality.

According to the Employment Development Department (EDD) of California, major employers in San Diego County include Collins Aerospace, General Dynamics, Kaiser Permanente, Naval Station San Diego, Scripps Health, SeaWorld, Sharp HealthCare, the University Of California, and the 32nd St. Naval Station.

Education

The San Diego metropolitan area is home to several esteemed educational institutions. These include the University of California, San Diego (UCSD), San Diego State University (SDSU), and University of San Diego (USD).

Additionally, the region boasts a strong network of public and private K-12 schools, offering families a range of educational options.

Housing Market

As mentioned above, the San Diego-Carlsbad housing market is known for its competitive nature and relatively high prices. Home buyers should be prepared for tight inventory and fierce bidding wars, particularly in desirable neighborhoods close to the coast.

As of January 2025, the median home value for the San Diego area was about $600,000 higher than the national median.

Cost of Living

While San Diego-Carlsbad offers a high quality of life, it also comes with a relatively high cost of living. Prospective home buyers should budget accordingly for housing expenses, as well as other necessities such as groceries, utilities, and healthcare.

According to a report from SmartAsset, the San Diego metro area ranked as the second most expensive metro in the nation, after San Francisco. To quote their report:

“San Diego-Chula Vista-Carlsbad jumped up four spots in this year’s rankings after the cost of annual living expenses increased by a whopping 21.32%, according to MIT. As a result, a single person must now earn $79,324 after taxes to live comfortably in that part of California.”

Climate and Weather

The San Diego area enjoys a Mediterranean-style climate with warm, dry summers and mild winters. Average temperatures range from the upper 60s (F) in winter to the mid-70s (F) in summer. Rainfall is limited and usually occurs from December to March.

While San Diego-Carlsbad experiences relatively stable weather patterns year-round, residents should be mindful of occasional heatwaves, wildfires, and coastal fog.

Overall, this area offers some of the best weather and most beautiful scenery of any city in the U.S. That’s partly why the San Diego real estate market is so competitive, with positive price forecasts stretching into 2025.