San Diego Housing Market Cools as Inventory Surges in Mid-2025
San Diego’s housing market has taken a notable turn in 2025, moving away from the breakneck pace of growth seen earlier in the year. After starting strong with double-digit appreciation, the market is showing signs of stabilizing as inventory builds and buyers take more time before making their next move. Let’s break down the latest numbers and what they mean for buyers and sellers alike.
The year began with remarkable momentum, highlighted by an 11.35% year-over-year increase in January when the median sale price hit $1,030,000. By May, prices peaked at $1,050,000. However, June brought a shift: the median sale price slipped to $1,025,000, representing a 2.77% year-over-year decline.
While this cooling may feel like a pullback, it’s better seen as the market finding balance after a period of rapid acceleration. For buyers who were previously priced out, this moderation may signal renewed opportunity. For sellers, it means pricing homes correctly is more important than ever.
Perhaps the most striking shift is in inventory. By July 2025, active single-family home listings reached 6,245 – a massive 43.53% increase compared to last year. Month-over-month growth continues as well, with July alone seeing a 2.11% jump.
This surge in inventory is giving buyers more negotiating power than they’ve had in years. With options at their fingertips, buyers can be more selective, placing pressure on sellers to present their homes competitively.
The flood of inventory has also led to longer market times. In June, the median home spent 21 days on the market – a 50% increase from June 2024. Compared to just one month prior, homes are also sitting longer, with days on market rising 16.67% from May’s 18-day average.
The takeaway? Buyers are no longer rushing into decisions. They’re carefully weighing their options, which makes strategic marketing, staging, and correct pricing even more critical for sellers.
For the first time in years, San Diego’s housing market is moving toward balance. June’s Months of Supply Inventory (MSI) hit 3.6 months – above the 3-month mark typically associated with a balanced market and edging into slightly buyer-friendly conditions. That’s a 33.33% increase compared to the same period last year.
This transition signals the end of the extreme seller’s market conditions that defined the past several years. Both buyers and sellers will now need to adjust their strategies as the market shifts into equilibrium.
San Diego’s housing market is undergoing a major adjustment. After rapid appreciation, prices are cooling, inventory is flooding in, and homes are taking longer to sell. For buyers, this marks a refreshing change – more options, more negotiating power, and more time to make decisions. For sellers, the new reality requires a proactive approach: competitive pricing, strong marketing, and flexibility in negotiations.
Whether you’re buying or selling, partnering with a knowledgeable local realtor will be key to navigating this new landscape. San Diego’s market is stabilizing, and with the right strategy, you can take full advantage of the opportunities it presents.
Stay up to date on the latest real estate trends.
You’ve got questions and we can’t wait to answer them.