San Diego Housing Market Steadies as Prices Hold and Inventory Shifts
After months of ups and downs, San Diego’s housing market seems to be finding its rhythm once again. By August 2025, the median home price settled at $1,025,000, reflecting a 1.49% year-over-year increase. While that’s slightly lower than July’s $1,040,000 figure, this modest shift signals that the market is normalizing — not falling.
Earlier this year, San Diego saw rapid growth, with January’s prices soaring more than 11% compared to the year before. Since then, appreciation has cooled, and prices have leveled off. Yet, the fact that home values remain above the million-dollar mark highlights the area’s consistent demand and long-term strength. Even as market conditions balance out, San Diego’s real estate continues to prove its staying power.
For most of 2025, San Diego has experienced a steady rise in available listings — but that trend appears to be shifting. In September, the number of active homes on the market dropped to 5,833, down 5.03% from August’s 6,142 listings.
This is the most noticeable inventory decline in several months, suggesting that supply buildup may be tapering off as the fall season approaches. However, inventory remains 25.55% higher than September 2024, meaning buyers still have far more homes to choose from than they did a year ago.
This seasonal cooling is typical as sellers who listed during the summer begin to step back, while serious buyers continue their searches before the year’s end. Overall, the market is showing signs of finding equilibrium — a healthy change from the fast-paced environment of recent years.
The San Diego housing market of 2023 and early 2024 moved at lightning speed, with homes selling in as little as two weeks. Today, that’s no longer the case. In August 2025, the median time on market reached 27 days, up nearly 59% from last year and 12.5% from July’s 24 days.
This slower pace doesn’t necessarily signal weakness — rather, it shows a shift in power dynamics. With more inventory available, buyers can afford to be more selective. Many are taking extra time to explore their options, compare properties, and negotiate terms that align with their budgets.
For sellers, this means pricing strategically is more important than ever. Homes that are priced right and well-presented continue to move, but those that are overpriced are sitting longer.
Using the Months of Supply Inventory (MSI) metric — the key indicator of market balance — San Diego remains in a neutral zone. With 3.3 months of supply in August 2025, the market sits squarely between the extremes of a buyers’ and sellers’ market.
This represents a slight improvement from July’s 3.5 months, but still a 17.86% increase compared to last year. Simply put, the market has shifted from the intense, seller-dominated environment of the past few years to one where both sides can negotiate more evenly.
Balanced conditions tend to create a healthier environment overall — with fairer pricing, reduced bidding wars, and more realistic expectations on both sides of the transaction.
San Diego’s housing market is entering a new phase — one characterized by stability, balance, and opportunity. Prices have held firm despite increased inventory and longer selling times, proving the region’s continued desirability.
For buyers, this is a window of opportunity to act before potential rate cuts spur renewed competition. For sellers, success now lies in smart pricing, quality presentation, and understanding current buyer behavior.
Whether you’re thinking about buying, selling, or simply watching the market, one thing is clear — San Diego’s real estate scene is adjusting to a healthier, more sustainable pace that benefits everyone in the long run.
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