If you've been watching the housing market lately, something probably feels different. Not scary different. More like the energy in the room has changed. The frantic pace of the last few years has given way to something quieter and more deliberate. Buyers are taking their time. Sellers are being more realistic. And the market is finally catching its breath.
So what's actually going on, and what does it mean if you're thinking about buying or selling this year?
Prices Are Still Positive, But Just Barely
San Diego home prices are technically still positive year over year, but the growth rate has fallen sharply compared to where we were:
- 2024: +11.2%
- 2025: +3.4%
- 2026: +0.51%
That's half a percent. And that's while nearly half of major U.S. cities are now seeing outright price declines. San Diego is holding on, which says something about the underlying strength here, but double-digit appreciation is clearly behind us for now.
At the street level, the local median has pulled back slightly from $1,050,000 last March to $1,020,000 this March, about a 2.9% dip. The sale-to-list price ratio is sitting around 99%, so homes are still selling close to asking price, just without the feeding frenzy.
Homes Are Sitting Longer, and That Changes Everything
Homes are averaging 30 days on market this year compared to 26 days last year, and Redfin's February data shows a similar trend at 34 days versus 27. That extra week or two might not sound like much, but in practice it changes the entire dynamic. Buyers can tour a home twice, get a proper inspection, and actually negotiate. That breathing room simply didn't exist two or three years ago.
For sellers, it means a 2022 strategy won't work in 2026. Homes priced to last spring's highs are the ones sitting. Buyers have options now, and they know it.
But Buyers Are Still Active
Despite the caution in the air, buyer activity has actually picked up. Pending sales are up 16.4% and closed sales are up 20.1% year over year. Demand hasn't evaporated. It's just become more selective, which is a healthier dynamic for everyone, even if it feels unfamiliar to sellers who got used to the old pace.
Rates Are Still the Biggest Factor
The 30-year fixed averaged 6.19% in late 2025 and has been hovering between 6.0% and 6.47% since, with most forecasters projecting a gradual ease toward 5.9% by year end. Buyers don't shop by price, they shop by monthly payment, and every tick down in rates pulls previously sidelined buyers back into the market. There was already a notable spike in loan applications early in 2026, a sign that buyers are watching closely and ready to move when the math works.
Single-Family vs. Condos: Two Different Markets
The detached home market is holding up well, with the median coming in at $1,070,000 in January, up 2% year over year. The condo market is softer. The median for attached homes dropped 4.4% to $632,000, and marketing timelines have stretched noticeably. A big part of that is HOA fees, often $500 to $800 or more per month, stacked on top of a 6.5% mortgage. For a lot of buyers, that combination simply doesn't pencil out anymore.
Inventory Is Still the Floor Under Prices
Even with all the softening, there still aren't enough homes for sale. Inventory is down 15.4% year over year, and that persistent scarcity is the main reason prices haven't dropped more. San Diego's geography and zoning have kept supply structurally low for decades, and that isn't changing anytime soon.
The Bottom Line
This market isn't crashing. It's rebalancing. Home values in San Diego have appreciated in 9 of the last 10 years, and the structural advantages here, geography, weather, jobs, biotech, military, don't disappear because rates are elevated.
For buyers, this is one of the most favorable environments in years. More time, fewer competing offers, and sellers willing to negotiate in ways they simply weren't before.
For sellers, your home can still sell at a strong price, but strategy matters more now than it has in a long time. Pricing right from the start, presenting well, and understanding what today's buyer actually cares about is what separates a clean sale from a drawn-out price reduction.
If you want to talk through what this market means for your specific situation, whether you're buying, selling, or just planning ahead, reach out at 858-335-4597. No pressure, just real insight based on what's actually happening right now.
Until next week's edition of San Diego Housing Market Mondays. Have a great week. -Jade
