San Diego Real Estate Market Update – June 2025

This month brings some big shifts: sales are slowing, inventory is rising fast, and we’re starting to see early signs of where the market may be heading. Let’s dive in.

Market Snapshot (Last 30 Days)

• New Listings: 2,682 homes hit the market
• Closed Sales: 1,989 homes sold
• Pending Sales: Only 1,753 homes went under contract

This means inventory is up by about 40% compared to pending sales—an imbalance that continues to grow month-over-month.

Trends We're Watching

1. New Listings vs. Sales

A consistent trend has emerged: over 2,500 new listings monthly, while sales hover around 1,500–2,000 transactions. This has been happening for several months now, leading to a clear oversupply.

2. Inventory Accumulation

One of the most telling signs? The accumulating inventory graph. Active listings are now 48% higher than last year's numbers at this time, indicating a buildup that could impact prices soon—unless demand kicks back in.

So Why Aren’t Prices Falling?

Despite the inventory spike, home prices have barely adjusted—just a fraction of a percent.
Why? Most homeowners are locked into sub-3.8% mortgage rates, and they’re not in a hurry to sell unless they have to.

As long as sellers hold firm and stay off the market, prices are staying stable—for now.

What’s Likely to Happen Next?

In the short term, we could see a modest softening in home prices as inventory continues to outpace buyer demand. With more homes sitting on the market and fewer buyers making offers, some sellers may be forced to adjust their pricing to stay competitive.

Looking at the mid to long term, the market could shift quickly. If interest rates drop even by 1%, we’ll likely see a significant portion of buyers reenter the market. Should rates approach 5% or lower, demand could surge, pushing competition—and possibly prices—right back up.

And we can’t ignore the bigger picture:
California still faces a massive housing shortage, with an estimated 3 million units needed just to meet demand. Here in San Diego, we’re geographically constrained—bordered by the Pacific Ocean, Mexico, and Camp Pendleton—so there’s simply nowhere to expand. That supply pressure supports home values long-term, regardless of short-term market shifts.

The Buildup of buyer demand: 

We’re in a watch-and-wait market. Inventory is up, but prices are sticky. Demand is paused, not gone—buyers are sitting on the sidelines, with record levels of cash in money market accounts, just waiting for the right moment.

Keep your eye on the inventory and values. If prices soften, it may not last long.

Buyer & Seller Advice

Sellers:

Now is not the time to test the market.
You need to be the next home to sell—either by being better priced or in better condition than nearby listings. Pricing strategically is key when buyer activity is soft.

Buyers:

Less competition = more opportunity.
First-time buyers, VA buyers, or anyone sitting on the sidelines: this is a rare window. Use it to negotiate, and ask for a “2-1 Buydown” from the seller. This can reduce your mortgage rate by 2% in year one and 1% in year two—making homes much more affordable while you wait for rates to stabilize.

Have questions or want to strategize your next move in San Diego real estate? Reach out to our team—we’re here to help you navigate the market with confidence.