San Diego Housing Market Update as 2024 Wraps Up

The San Diego housing market has been a dynamic blend of shifting trends, with high mortgage rates, inventory fluctuations, and persistent demand playing key roles. As we near the end of 2024, let’s explore how these factors have shaped the market, where it’s headed, and what it means for buyers and sellers alike.  

Home Prices Show Seasonal Decline But Remain Strong

In June 2024, the median price for single-family homes in San Diego County reached a record $1.05 million. Despite high mortgage rates slowing sales, demand has kept prices stable. Even as rates approached 7%, San Diego’s ever-present demand prevented significant price drops.  

November 2024 marked the 18th consecutive month of year-over-year price growth for single-family homes, though prices followed a predictable seasonal decline after the summer peak. This mild contraction aligns with historical trends and is expected to continue into early 2025 before rebounding in the spring.  

Mortgage Rates Impact Supply and Demand 

Mortgage rates have played a critical role in shaping buyer and seller behavior. Rates dipped significantly between May and September but climbed closer to 7% in October. This volatility has softened both supply and demand, slowing the market’s pace. Buyers and sellers seemed more willing to engage when rates hovered near 6%, but the higher rates are likely to limit activity through the winter.  

Inventory Trends Signal Return to Seasonal Patterns 

San Diego County’s housing inventory has followed a volatile path since the pandemic. Inventory plummeted by 79% between July 2019 and January 2022, creating intense competition. While rising rates throughout 2024 brought inventory back up, the past two months have seen declines, signaling a return to traditional seasonal patterns.  

From January to October 2024, inventory nearly doubled, peaking in October before contracting in November. These changes are likely tied to both seasonal norms and rate-driven market hesitancy. As the new year begins, inventory is expected to grow again, aligning with typical market rhythms.  

Sellers Regain the Upper Hand: Months of Supply Inventory (MSI) 

MSI measures the balance between supply and demand in the market. Historically, a balanced market in California is around three months of supply. In November, San Diego’s MSI fell below three months, returning the market to favor sellers.  

This trend marks a reversal from September 2024, when MSI hit 3.2 months, indicating a more balanced market. By November, the reduced MSI showed strong demand relative to available inventory, underscoring the region’s persistent desirability despite high borrowing costs.  

What This Means for Buyers and Sellers  

For Buyers  

Navigating the San Diego market requires strategic planning. While mortgage rates remain high, leveraging seasonal slowdowns in price growth can create opportunities. Partnering with a skilled real estate professional is key to identifying listings that fit your budget and timing your purchase for maximum value.  

For Sellers  

Low inventory and persistent demand make this a prime time to sell, especially before competition rises in the spring. With prices holding steady and the market favoring sellers, those who list now are well-positioned to attract serious buyers.  

Looking Ahead to 2025  

As 2024 draws to a close, the San Diego housing market remains a complex yet resilient landscape. High demand, fluctuating mortgage rates, and seasonal trends continue to define the market dynamics.  

Looking forward, inventory is expected to increase in early 2025, bringing fresh opportunities for buyers and sellers. However, ongoing rate volatility and evolving economic conditions will play a significant role in shaping market activity. Whether you’re buying or selling, staying informed and working with knowledgeable professionals is essential for navigating this ever-changing market.