San Diego Home Prices Stabilize as Inventory Surges in 2025
San Diego’s real estate market continues to evolve in 2025, with home prices showing early signs of leveling out after two years of rapid growth. Following a record peak of $1,054,180 in June 2024, the median sale price in April 2025 dipped slightly to $1,015,000—a 3.10% year-over-year decrease. While this minor pullback may raise eyebrows, it's important to view it in the context of prior gains, including an 11.35% year-over-year increase recorded just a few months ago in January.
What this signals is not a dramatic market correction, but rather a natural rebalancing as the market adjusts to elevated prices and shifting buyer behavior. Prices remain well above pre-pandemic levels, confirming long-term appreciation in the region.
One of the most notable shifts in the San Diego housing market is the rapid increase in inventory. As of May 2025, there are 5,664 single-family homes for sale, a 66.34% increase from the same time last year. Even more striking is the 13.19% jump from April to May alone, reflecting accelerating momentum.
This rise in listings is giving buyers more choice and negotiating power, a stark contrast to the ultra-competitive conditions of 2021 and 2022. Sellers, meanwhile, are likely trying to capitalize on still-elevated prices before further cooling sets in. Overall, this inventory growth marks a key turning point toward a more buyer-friendly landscape.
With more listings to browse and less urgency, buyers are becoming more selective. The median time on market in April 2025 was 18 days, a 50% increase from the same period last year. While still brisk by historical standards, this shift indicates a clear cooling in buyer urgency.
The high watermark for this trend came in January 2025, when listings lingered for 29 days on average—the longest period in recent years. This extended time on market reflects a more measured pace, where buyers are weighing their options and holding off on snap decisions.
For the first time in years, San Diego is nearing a balanced housing market. According to the Months of Supply Inventory (MSI)—a key indicator of market balance—San Diego reached 2.9 months of supply in April 2025, just shy of the 3-month threshold that defines a neutral market.
Earlier in the year, January and February recorded 3.4 MSI, temporarily pushing the region into buyers’ market territory. This is a dramatic shift from the pandemic years, when MSI consistently sat well below 3 months, indicating an aggressive sellers’ market.
Now, with more listings, longer time on market, and a plateau in pricing, buyers are reclaiming leverage in negotiations, and sellers are adjusting expectations accordingly.
The San Diego housing market in 2025 is no longer the frenzied, seller-dominated arena it once was. With home prices stabilizing, inventory rising, and time on market increasing, the region is moving toward a healthier, more sustainable pace.
For buyers, this means more time to make decisions, more options to choose from, and more room to negotiate. For sellers, it means pricing competitively and working with an experienced agent is more important than ever.
Whether you're buying, selling, or simply watching the market, 2025 is shaping up to be the year of balance—where smart strategy, timing, and local expertise will matter more than ever.
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