San Diego Real Estate Market Update

Summer is almost upon us!

Here’s an update of where we’re at currently in this unpredictable market.

San Diego Real Estate Market Update – May 2025

As of May 2025, San Diego’s real estate market exhibits signs of stabilization, influenced by elevated mortgage rates and a gradual increase in housing inventory.

Market Overview

• Median Home Price: Approximately $1,015,000 in April 2025, a slight decrease from $1,040,000 in March.  
• Sales Volume: Year-over-year home sales rose by 9.4% in April, indicating sustained buyer interest despite affordability challenges.  
• Inventory Levels: The Unsold Inventory Index increased to 2.9 months in April from 2.2 months the previous year, suggesting a modest shift towards a more balanced market.  
• Days on Market: Homes are selling swiftly, with a median of 17 days to pending status, particularly in neighborhoods like North Park, Chula Vista, and parts of East County.  

Mortgage Rates and Affordability

• Current Rates: The average 30-year fixed mortgage rate stands at approximately 6.76%, while the 15-year fixed rate is about 5.89%.  
• Affordability Gap: Prospective buyers in San Diego need to earn around $241,200 annually to afford a median-priced home, which is about $135,000 more than the income required for renting.  

Rental Market Dynamics

• Rental Costs: The average monthly rent in San Diego is approximately $2,571, making renting a more viable option for many residents.  
• Lifestyle Choices: Some high-earning residents opt to rent to maintain financial flexibility and avoid the constraints of homeownership. 

Outlook

The San Diego housing market is experiencing a period of adjustment, with increased inventory and high mortgage rates influencing buyer behavior. While home prices remain elevated, the market shows signs of moving towards equilibrium. Potential buyers may find more opportunities as the market continues to evolve, but affordability remains a significant consideration.