San Diego Housing Market Cools After a Hot Start to 2025
San Diego’s real estate market has been a study in contrasts this year, starting with rapid appreciation and later shifting into a more balanced phase. While early 2025 saw double-digit price gains, recent months have shown signs of moderation, creating new dynamics for both buyers and sellers.
In January, San Diego home values were climbing fast, with median sales hitting $1,030,000 — an 11.35% increase year-over-year. By May, prices peaked at $1,050,000. However, June brought a pullback to $1,025,000, a 2.77% year-over-year decline.
This cooling trend marks a significant departure from the rapid appreciation seen earlier in the year. Instead, the market appears to be settling into a more sustainable pace, reducing pressure on buyers while helping to maintain long-term stability.
One of the biggest stories shaping the market is the flood of new listings. By July 2025, San Diego had 6,245 single-family homes on the market — up an astonishing 43.53% compared to last year. Month-over-month, inventory climbed another 2.11% from June to July.
For buyers, this surge has created more choice than they’ve had in years. It also represents a shift in leverage, with buyers now enjoying greater negotiating power compared to the ultra-competitive conditions of recent years.
With inventory rising, homes are spending more time on the market. In June 2025, the median listing sat for 21 days before selling — up 50% from June 2024. That’s also a 16.67% increase from May’s 18-day median.
This trend suggests buyers are exercising caution and taking their time, given the wider selection of available properties. Gone are the days when homes sold within days of hitting the market; today’s environment allows for more deliberate decision-making.
The Months of Supply Inventory (MSI) is a critical measure of market balance. California’s historical average hovers around three months, with lower figures indicating a seller’s market and higher figures pointing to a buyer’s market.
San Diego currently sits at 3.5 months of supply as of July 2025. While slightly down from June’s 3.6 months, this still reflects a 34.62% year-over-year increase. The result? A balanced market where neither buyers nor sellers dominate. This equilibrium helps support stable pricing while creating healthier, more sustainable conditions across the board.
San Diego’s housing market has shifted gears in 2025. After a rapid start to the year, price growth has slowed, inventory has surged, and homes are taking longer to sell. The end result is a more balanced market, offering opportunities for both buyers and sellers. Buyers benefit from more options and negotiating room, while sellers can still count on solid demand to support property values.
As the market continues to adjust, staying informed on inventory trends and pricing shifts will be key for anyone planning to buy or sell in San Diego. Partnering with a knowledgeable local realtor can help you navigate this evolving landscape with confidence.
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