San Diego 2025 Q1 Review

• While market activity has still been high, it has recently started to settle. There were 4.6% more homes sold in January 2025 than in January 2024, but the average time on market increased 10 days year over year to 37 days. Experts say that it’s likely that 2025 will be the slowest year for home sales in San Diego, due to a number of factors affecting supply and buyer interest.

• A large reason for falling buyer interest is the lack of affordable and moderately priced homes. In 2023, 9,632 housing permits were issued, but 73% of those were in the “above moderate” price category. In January 2025, despite experiencing a 20% year-over-year increase in inventory, home sales actually dropped 23% from December 2024.

• In spite of predictions late last year, mortgage rates remain just below 7% in most areas of the United States. According to Fannie Mae’s projections, mortgage rates are likely to remain above 6.5% throughout 2025. Many San Diegans are currently unable to afford mortgages, with a new report finding that San Diego has the 6th lowest rate of under-30 homeownership in the country. 

Quick Run Down

The San Diego housing market is defined by inventory constraints and persistently high mortgage rates. As of now, it is a seller’s market, and it is likely to remain so in 2025 and possibly beyond. Still, there are positive signs on the horizon pointing to an improved outlook in the near future. 

Its inventory issues can be partly attributed to its remarkable economic stability, as interest pours in due to promising growth in the tech and life science sectors, among other factors. That said, the heightened investor interest also creates competition for prospective homebuyers. 

The proportion of available properties is skewed towards high-income earners and rents are not likely to drop anytime soon. But should tariffs and other economic forces such as inflation ease, construction may pick back up, increasing supply and shifting both rents and prices in buyers’ and renters’ favors.

Quick Advice

• If you can afford to purchase a home now you should be looking into your options.

• To those thinking of selling there are still buyers wanting to get into San Diego homes.