The San Diego real estate market experienced modest home price growth over the past year, with values generally stabilizing after prior volatility.
It also experienced an increase in housing inventory during that same timeframe, giving buyers more choices compared to recent years.
But what does this mean for homebuyers in 2026? What’s the general outlook and forecast for the San Diego real estate market in 2026?
Below, you’ll find an assessment of current housing market conditions across the San Diego metro area, with some long-range predictions for 2026.
Earlier this month, Realtor.com’s real estate research team from Realtor.com published a housing market update with data for the nation’s 50 largest metro areas.
These monthly reports help us connect the dots between various market trends to get a broader sense of what’s happening in the real estate market.
According to this latest update, the San Diego-Carlsbad-Chula Vista metro area experienced the most significant increase in real estate list prices over the past year.
Granted, there’s an essential difference between list prices and sale prices. But the two metrics tend to coincide.
When list prices increase significantly over a certain period, sale prices and median home values tend to follow suit.
Recent data from Zillow revealed that the median home value for the county has also risen over the past year. As of June 2026, the average price for a home in San Diego is $1,007,800, a 2.3% decrease from last year.
This marks a turning point within the San Diego-area real estate market.
Like most metro areas nationwide, the San Diego housing market has gained inventory over the past year, giving buyers more choices than they had during the pandemic-era housing shortage.
We’ve seen a similar reduction in demand from buyers due to a rise in mortgage rates. But there are still more buyers in the market than properties available, which will keep the market competitive well into 2026.
There is only a 2.4-month supply of single-family homes in San Diego and approximately a 4.0-month supply of condos and townhomes.
That characterizes a seller’s market for single-family homes and a more balanced market for condos. A balanced market would be one with a 4- to 6-month supply of homes.
That means it would take 4 to 6 months for the current supply of homes on the market to sell at the current sales pace. Generally speaking, a 4- to 6-month supply means home prices are increasing at a moderate and healthy pace.
According to a recent report, the total number of active real estate listings in the San Diego metro area increased significantly over the past year, giving buyers more options than they had a year ago.
Inventory growth has moderated in recent months, but active listings remain well above the extremely low levels seen during the pandemic.
The real estate market in San Diego also has more price reductions these days. This means local sellers are more willing to adjust pricing when homes don’t receive strong buyer interest.
Last month, roughly one in five listings experienced a price reduction.
Of course, all of these things are connected. Higher inventory has given buyers more negotiating leverage than they had a year ago, although well-priced homes continue to attract strong demand.
While the market remains favorable for sellers overall, today’s buyers generally have more choices and negotiating power than they did during the highly competitive conditions of recent years.
In some respects, San Diego currently has the hottest housing market in California as of mid 2026.
According to RedFin, the San Diego real estate market in 2026 is very competitive. Homes are selling in about 25 days on average, slightly faster than earlier this year but at a more measured pace than during the pandemic.
Further, homes in San Diego receive an average of 3 offers, making it a competitive situation for buyers vying for the same house. Sellers can also snag a sale price close to their listing price.
More specifically, the average home sells for about its listing price and goes pending in about 25 days. Hot homes fetch even higher sale prices, selling at about 1% to 2% over the listing price and going pending in about 10 days.
The San Diego area has a lot going for it regarding quality of life, all of which attract home buyers into the market.
Characteristics like these will help contribute to a healthy San Diego real estate market in 2026.
Mortgage interest rates have seen incredible growth over recent years. According to the latest data from Freddie Mac, the average rate for a 30-year fixed-rate mortgage hit 6.46% as of June 2026.
High mortgage rates have been a thorn in the side of homebuyers and have kept many of them out of the housing market due to affordability issues.
Inflated rates have also put a damper on refinancing, as homeowners looking to refinance their mortgages have little reason to do so until rates finally start to dip.
And that might happen going forward, according to MBA analysts. Mortgage rates may finally decrease late in 2026. More specifically, experts anticipate mortgage rates to go down to 6% or lower by Q4 2026.
That means homebuyers in San Diego and surrounding areas can snag a much lower interest rate for their home loans next year.
Even with an increase in the average home price in San Diego, lower interest rates will make it easier for homebuyers to get approved for a mortgage in 2026.
Given the current supply and demand situation, a realistic forecast for the San Diego real estate market in 2026 would include steady home price growth over the coming months. And researchers from Zillow recently offered that very prediction.
Specifically, they predicted that the median home value for the San Diego-Carlsbad metropolitan area would rise modestly over the next year. That would closely mirror the average rate of home price appreciation going back 40 years or so.
In summary, the San Diego real estate market in 2026 is a relatively healthy one. Home prices are expected to rise moderately, while mortgage interest rates are expected to dip.
Both buyers and sellers will be interested in a San Diego real estate market update for today’s market and the market going forward into 2026. This will have a direct impact on their decision-making in terms of whether or not the new year will be an excellent time to buy or sell.
If you’re looking to buy in San Diego, CA, we can help. At Sammamish Mortgage, we offer various mortgage options for you to choose from, including our fixed-rate mortgages, adjustable-rate mortgages, and jumbo loans. Get pre-approved for a mortgage today. We assist borrowers across California, Washington, Colorado, Idaho, and Oregon. Visit our website to get an instant rate quote or call us today to have your mortgage questions answered!
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