From great weather and beautiful scenery to multiple industries and a huge variety of activities, many things make San Diego a desirable place to live.

In addition, this Californian city has a strong job market that attracts many new residents and supports the local economy, which also has a positive effect on the real estate sector.

San Diego, located in Southern California near the Mexico-United States border, has had some of the highest rent and price appreciation in the country's history. It's also an attractive destination for retirees and millennials, which has driven up housing demand.

However, homebuyers and real estate investors should consider a few factors before choosing San Diego for their next purchase.

Also, it's important to find out if the San Diego housing market is expected to remain robust or is likely to crash soon.

Fortunately, you can find all the information you need to know if this real estate market is still favorable and make a sound decision about your next investment. Read on!


The San Diego housing market is still competitive. Each house listed in this city receives five offers on average. Also, properties sell faster than in other major cities.

As with many other housing markets across the United States, home prices in the San Diego metropolitan area have fallen from mid-2022 to this year's first quarter as mortgage interest rates have skyrocketed.

However, while housing prices in San Diego have fallen slightly compared to last year's figures, the value of real estate properties in this city is still high.

In addition, many factors make San Diego an attractive destination for those looking for the perfect place to live.

San Diego Housing Market Trends

As mentioned, the San Diego real estate market is still hot. The city has a diverse and strong economy that attracts many people and increases the demand for homes. In addition, the housing supply is limited.

Resultantly, home prices are often high. In recent months, rising interest rates have had major effects on the housing market. Overall, it's more difficult to buy properties because they're less affordable.

While this has caused a drop in demand and a slowdown in the local real estate market, San Diego appears to be settling into a steady pace. Here are the latest trends that landlords and property managers should consider.

San Diego Median Sales Price

In San Diego, CA, the median price for a home was $875,000, which accounts for a 3.3% drop year over year.

According to Redfin's latest reports, this is the median price by type of housing:

  • $1,050,000 for single-family homes
  • $797,500 for townhouses
  • $600,000 for condos/Co-ops

Although the March 2023 reports showed that the median listing home price fell by over 3%, it's still higher than in August of last year. Back then, the median sale price for a residential property in San Diego was $850,000.

Additionally, the median sale price has been rising steadily since December 2022 after falling to $785,000.

Housing Inventory

The housing supply in San Diego, CA, has also fallen slightly. However, these changes were not significant.

In March of last year, the San Diego housing inventory fell as low as 0.70 (in months), declining for the rest of the year. The supply peaked at 2.32 units in October but dropped to 1.85 months just two months later.

After that, in January of this year, the housing supply rose to 1.9 months. However, the market has shown signs of another drop in inventory over the past few months.

Although many homeowners took advantage of rising home prices, and there was still a robust seller's market, housing inventory is expected to remain low.

Housing Demand

Since the housing supply is still low, homes get multiple offers. The average house is sold for around the list price. However, hot properties go under contract for around 3% more.

According to Redfin's latest reports, around 40.1% of San Diego homes sold above the list price in March 2023, which accounted for a 31.4% drop year over year.

These are the statistics by type of housing:

  • Single-family homes (41.2% above list price)
  • Townhouses (38.7% above list price)
  • Condos/Co-ops (39.4% above list price)

Contrastingly, 23.1% of the city's listed properties had price drops. It's an 8.2% increase compared to last year's figures.

Here's more information based on each type of housing:

  • Single-family homes (23.6% price drop)
  • Townhouses (34.0% price drop)
  • Condos/Co-ops (21.0% price drop)

Homes Sold

Redfind's latest data also showed that the number of homes sold in San Diego, CA, fell by 30.4% in March of this year.

Based on such reports, 891 houses were sold in this city, down from 1,281 last year. However, the number of homes sold reported in March 2023 is the highest in the past six months.

In January of this year, the number of houses sold dropped to 559, which means that over 300 more units have been listed and purchased since then.

Median Days on the Market

The median days on the market reported in March 2023 was also higher compared to last year's reports. On average, homes spend 20 days on the market before going under contract.

It's 12 days longer than in 2022. However, homes now spend less time on the market before being purchased.

In January of this year, the median days on the market rose to 36 days, but it has fallen steadily over the past two months.


Across San Diego, the unemployment rate is low, which means that most residents have a solid source of income. In addition, most existing homebuyers benefited from 2021 and 2022 low mortgage rates.

As a result, foreclosures and delinquencies remained at low levels, according to Black Knight's latest reports. In December of last year, only 0.10% of California homes were in foreclosure.

SoFi rated California 18th for the highest foreclosure rate based on data collected in March of this year, as 3,376 out of 14,328,539 housing units went into foreclosure.

Considering this information, the state's foreclosure rate is one filing in every 4,244 housing units.

According to SoFi's latest reports, San Bernardino, Lake, Kings, Trinity, and Solano were the counties with the most foreclosure per housing unit.

Factors Affecting the San Diego Real Estate Market

Many factors can affect the real estate market, including the health of the local economy, higher interest rates for mortgage financing, and changes in the population.

Over the past several years, the San Diego housing market has been influenced by the following:

San Diego's Economy

The economy can greatly influence the housing market in San Diego, CA, and other US cities.

Overall, housing demand, supply, and trends are highly dependent on the economy, so they vary based on different factors, such as manufacturing activity, Gross Domestic Product (GDP), and unemployment rate.

If the economy is strong and people have a robust source of income, housing demand increases because more people feel confident about buying properties.

As mentioned, San Diego has a robust economy and offers plenty of job opportunities. Actually, it has outperformed the country in recent months.

According to December 2022 reports, non-farm employment grew by over 50,000 years over year to almost 1.55 million job positions.

In addition, San Diego's unemployment rate fell by 1.2% year over year to 2.9%, below the national average, by the end of last year's fourth quarter.

Specifically in San Diego County, the unemployment rate was 3.7%, according to the government's California Labor Market Information report issued in April of this year.

While many experts forecast a mild recession this year, San Diego's economy is robust enough to stay afloat in periods of uncertainty with negative trends.

Local Government Policies

Each local government sets policies regarding tax deductions, credits, and subsidiaries, which also influence the San Diego real estate market, as they often determine changes in supply and demand.

California had the nation's highest sales tax in 2021, reaching 7.25%. However, with an effective rate of 0.74% in 2022, taxes are less harsh now.

Mortgage Interest Rates

The San Diego housing market is also impacted by the country's mortgage interest rates. As they are rising, many people don't want to buy properties.

According to Redfin's latest reports, this was the national average APR on May 3 of this year:

  • 7.011% for a 30-year fixed-rate mortgage after an 11% rise in the last seven days
  • 6.228% for a 15-year fixed-rate loan after a 15% rise in the last seven days
  • 6.095% for a 5-year Adjustable Rate Mortgage (RAM) after a 12% rise in the last seven days


Investors should also consider demographic trends to see if buying a property in San Diego is a good idea.

Demographics comprises key information on the composition of the population in terms of race, income, migration patterns, age, and regional preferences. Therefore, changes that affect these groups also influence housing demand.

Analyzing demographics can help experts determine how many people expect to buy a second home in San Diego, CA, for example.

Additionally, the number of migrants moving to the city may also have a major impact on the real estate market.

Redfin's reports on migration and relocation trends showed that around 3% of homebuyers across the country searched to move into San Diego. Most come from major metros, such as Los Angeles, Chicago, and San Francisco.

Plus, about 72% of San Diego homebuyers wanted to stay within the metropolitan area.

The city is also one of the country's most popular destinations for immigrants, especially people immigrating from Mexico to the United States.

Will the San Diego Housing Market Crash Soon?

Many potential buyers are also concerned about the country's economic situation, as experts expect a slowdown in the real estate market.

As a result, many people think that the San Diego housing market could crash soon, posing risks to their real estate investments.

However, as mentioned, analysts predict that the real estate market will experience a slowdown. In fact, most claim that it won't be similar to the Great Recession although major changes are expected.

Additionally, other facts and trends show that the San Diego housing market is not likely to crash this year. These are:

Growing Demand

Both in San Diego County and in other parts of the city, the home and rental market remains competitive, as they're attractive destinations for potential homebuyers.

The more people move to San Diego, CA, the higher the housing demand. Experts have seen this trend across different demographics.

Millennials in their prime buying years believe San Diego is a great place to find the perfect home. In addition, Hispanics who move to the country also consider purchasing resident properties in this city.

Low Supply of Newly Constructed Homes

Analysts expect housing inventory to remain low due to a lack of newly constructed homes.

According to experts, the supply of newly built houses must return to pre-2007 levels to have a significant impact on the city's inventory.

However, the home inventory has remained very low in recent months. Many believe that low supply results from high demand. In addition, fewer people are willing to seek regulatory approval to buy land and build more properties.

Low Inventory

As mentioned, the housing supply in San Diego has remained quite low since last year despite having risen slightly in recent months.

In any city, the housing market is at risk of a crash when the demand is low because there are almost no homebuyers and the supply is excessively high.

However, in San Diego, homebuyers are still actively searching for residential properties. In addition, there's still strong demand and low supply.

Stricter Requirements to Get a Home Loan

Around 15 years ago, most people could get their loan applications approved in no time. Lenders didn't require a down payment or a specific credit score in 2007, for example.

However, the lending criteria have become stricter over the years. Now, borrowers must meet many requirements to get mortgage financing.

Fewer Foreclosures

Across California, including San Diego, foreclosures remain low. Although it's ranked 18th for the country's highest foreclosure rate, this state doesn't report too many foreclosure filings per household.

Experts explain that foreclosures have fallen across the country because people own significant equity in their property and have healthy assets or ample cash.

San Diego Housing Market Statistics

In addition to recent trends and facts, San Diego homebuyers should consider the following statistics to make better investment decisions:

  • Purchase applications in San Diego rose for the fourth consecutive week in the last week of March, the Purchase Index from the Mortgage Bankers Association showed.
  • The University of Michigan's Survey of Consumers showed that consumer sentiment had risen to 64.9 on a 100-point scale. However, it's down 2.3 points year over year.
  • The California Association of Realtors showed that the median sale price for a condo in San Diego County was $635.00 in March 2023, which accounts for an increase of 3.3% from February of this year and March of last year.
  • According to Redfin's reports, the sale-to-list price in San Diego was 99.6% in March 2023 after a 6.4% drop year over year.
  • Between February and April 2023, around 28% of San Diego homebuyers expected to move out of the city.
  • During the same period, 72% of San Diego homebuyers expected to stay within the metropolitan area.
  • The total number of jobs rose by over 50,500 year over year. The fastest-growing fields included leisure and hospitality, other services, and education and health services with 10.7%, 9.3%, and 5.85%, respectively.

Housing Market Predictions

What do experts think about the future of the San Diego housing market? Is it expected to slow down?

Here's what analysts have said about this city's real estate forecast:

Drop in Home Sales

Most experts expect the rising interest rate to have a negative effect on home sales, causing a drop of at least 10% by early 2024. In addition, analysts believe that the median days on the market will be higher.

According to their predictions, San Diego homes could spend up to 10 more days on the market before going under contract.

Rising Interest Rates

Although mortgage interest rates have reached record highs, experts believe they'll continue to rise due to inflation and a potential mild recession.

Analysts predict that mortgage rates will rise to 7.70% for 15-year loans and 8.50% for 30-year loans.

Drop in Home Prices and Affordability

As sales will decline, analysts also believe that housing prices will fall by around 5% this year. Many think unaffordability will be the main cause, as properties will look quite expensive.

Housing Inventory

Experts also believe that the housing inventory will remain unchanged unless home prices rise.

San Diego Housing Market Forecast

According to the real estate database company Zillow, the typical price for a house in San Diego County is $843,047. However, home values ​​have fallen slightly over the past year.

Does it mean the San Diego real estate market will suffer? According to experts, America's finest city is still very attractive for homebuyers and has a robust economy.

As a result, the local housing market is expected to remain strong. Zillow says that the real estate appreciation rate will be lower than when mortgage rates went down last year.

Therefore, rising mortgage rates will also affect the demand and average total market time. In the San Diego-Carlsbad Metro, home values ​​are expected to drop at least 1.1% before rising at least 0.4% later this year.

The Final Verdict

Whether you're in downtown San Diego or another part of America's finest city, you can find great real estate investment opportunities, a strong job market, and exciting activities to do. That's what makes this destination an excellent place to buy a home.

However, even though it's solid, the San Diego housing market has also experienced fluctuations. Therefore, if you want to know whether buying a property in this city is a good idea, you should contact an experienced real estate agent.

Professionals will help you analyze different aspects, including your budget, to make a sound decision.

Frequently Asked Questions

Is San Diego a Seller's Market?

Yes, it is! Since demand is high and prices are driven up, San Diego is considered a seller's market.

Is It a Good Time to Buy a House in San Diego?

Currently, home prices in San Diego are high, so many people think it isn't a good idea to buy a property in that city. However, it depends on various factors, such as your personal situation and lifestyle preferences.

Frequently Asked Quesitons

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!

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The information on this website is from public sources, for informational purposes only and not intended for legal or accounting advice. DoorLoop does not guarantee its accuracy and is not liable for any damages or inaccuracies.