Is San Diego’s Housing Market Cooling? What Buyers and Sellers Need to Know Now
Is San Diego’s Housing Market Cooling? What Buyers and Sellers Need to Know Now
San Diego’s real estate scene is buzzing with change, and if you’re a buyer, seller, or just a market enthusiast, you’ll want to pay attention. A recent article by Keith Griffith, titled "California Home Prices May Drop Soon as Housing Market Flashes Warning, Real Estate CEO Says" (published March 28, 2025, on Realtor.com), highlights a critical shift: California’s housing inventory is surging, with San Diego leading the pack. What does this mean for our sunny city? Let’s break it down with fresh insights, local data, and actionable tips to help you navigate this evolving market.
The Article at a Glance
Griffith’s piece points to a 44% statewide jump in active home listings in February 2025 compared to last year—well above the national increase of 28%. San Diego stands out with a whopping 61% spike in inventory, ranking it among the top U.S. cities for growth in available homes. According to Nick Gerli, CEO of Reventure App, this rising supply could signal a slowdown in price growth or even slight declines by year’s end, especially in markets like ours where affordability is stretched thin. While California’s inventory is still below pre-pandemic levels (just 0.6% of homes are listed), the shift is notable—and it’s already showing up in San Diego’s falling list prices per square foot.
What This Means for San Diego
San Diego’s market has long been a hotbed of competition, fueled by high demand and limited supply. But with listings up 61% year-over-year, we’re seeing the pendulum swing toward balance. The median list price in February hovered at $948,000—steep for a median household income of $104,000. Add in a 2% drop in median list price per square foot, and it’s clear: buyers are gaining leverage. Sellers, meanwhile, may need to rethink their strategies as homes sit longer and price cuts become more common.
This isn’t a crash—it’s a reset. San Diego’s unemployment remains low, and mortgage defaults are minimal, per Gerli’s analysis. We’re not Florida, where oversupply has triggered sharper corrections. Instead, think of this as a breather after years of relentless price climbs. For context, the San Diego Association of Realtors reported that the median home price hit $975,000 in March 2025—still up 4% from last year but growing at a slower pace than the 10%+ surges we’ve seen recently. Inventory is climbing, but we’re still far from a buyer’s market.
Data That Tells the Story
Inventory Surge: Active listings in San Diego jumped 61% from February 2024 to 2025 (Realtor.com).
Price Trends: Median list price per square foot dropped 2% year-over-year in February 2025, signaling softening demand for premium properties.
Time on Market: Homes are lingering longer—up to 34 days on average in March 2025, compared to 28 days a year ago (San Diego Association of Realtors).
Affordability Gap: A $948,000 median list price requires an income of roughly $190,000 to afford comfortably—nearly double San Diego’s median household income.
Practical Advice for Buyers and Sellers
For Buyers: This is your moment. More homes on the market mean more choices and less pressure to bid wildly over asking. Focus on neighborhoods like North Park or La Jolla, where inventory growth is outpacing sales. Don’t rush—negotiate hard, ask for concessions, and target properties sitting longer than 30 days. With interest rates stabilizing (around 6.5% for a 30-year fixed mortgage in early 2025), your purchasing power is stronger than it’s been in years.
For Sellers: Price smartly from the start. The days of listing high and waiting for a bidding war are fading. Highlight your home’s unique value—think updated kitchens or proximity to Balboa Park—and consider offering incentives like covering closing costs. Stage well and price competitively; homes priced right are still selling within 45 days, per local MLS data.
Why This Matters to You
San Diego’s market is at a crossroads, and staying informed gives you the edge. Whether you’re dreaming of a beachside condo or ready to cash out on your investment property, understanding these trends can save you time, money, and stress. Curious for more? Check out the original article [here](insert link to Griffith’s piece) for a deeper dive into California’s housing signals.
Let’s Keep the Conversation Going
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