San Diego Real Estate Update: September 2026

San Diego Real Estate Update: September 2026

With mortgage rates hovering around 7.25% and pending sales dropping by 4% over the last 30 days, it is easy to assume the housing market is heading downhill. But it’s not all doom and gloom!

While the market is moving at a slower, more deliberate pace, key opportunities remain for both buyers and sellers. Here is a breakdown of the latest local stats, economic factors shaping inventory, and strategic advice to help you navigate today's real estate landscape.

By the Numbers: A Balanced Market

Over the past 30 days, the housing data shows a market finding its equilibrium:

Active Listings: Over 1,600 homes came onto the market, maintaining the average pace seen throughout the year.

Pending Sales: About 1,000 homes went into escrow, reflecting a slight 4% dip in homes going under contract.

Expired Listings: Nearly 600 properties came off the market unsold.6Because new listings and expiring listings are balancing each other out, inventory levels remain stable.

On a positive note, closed sales ticked up slightly to 1,400 homes. While this is still below the historical normal average of around 2,500 monthly closings, it demonstrates that properties priced right are continuing to move.

A "Tale of Two Tapes" Economy

We are currently seeing a split housing economy driven by broader macroeconomic trends:

High-Net-Worth Buyers: Strong S&P 500 gains (~16% year-over-year) and persistently low overall unemployment are enabling wealthier demographics to remain active, invest, and purchase real estate.

Entry-Level & Blue-Collar Buyers: Inflation at 3.5%, static wage growth, and 7.25% mortgage rates create financing and affordability challenges for first-time buyers.

Why Inventory Will Remain Tight

If you are waiting for a surge in inventory to drive prices down significantly, three major factors suggest inventory will remain constrained:

Low Foreclosure Rates: Foreclosures remain at historic lows with minimal delinquency increases. Homeowners are generally on solid financial ground.Slower

New Construction Permits: Developers are slowing permit applications in response to the sluggish market pace, limiting future new housing supply.The "Rate Lock" Effect:

Existing homeowners with locked-in 3% to 3.5% interest rates are choosing to stay put to avoid steep increases in monthly payments.Expect this steady, slow-paced market to continue until mortgage interest rates move back down toward the 5% range. When interest rates eventually ease, buyer demand and sales activity are expected to rise quickly.

Strategic Advice for Buyers and Sellers

For Buyers: Target New ConstructionIf you are looking for value, turn your attention to new residential developments, particularly in inland neighborhoods. Builders are offering aggressive incentives to move inventory, including:3-2-1 Interest Rate Buy-Downs: Starting with rates as low as 3.5% in year one.7-Year ARMs: Fixed rates locked in the 5% range.Added Value: Builder credits toward closing costs, appliance packages, and upgraded finishes. Tip: Always bring a dedicated real estate broker with you when visiting new construction sites to negotiate on your behalf.

For Sellers: Work with an Experienced ProfessionalIn a shift away from the rapid turnover of recent years, today's market demands expertise. Experienced, full-time brokers are closing the vast majority of successful transactions today. Pricing correctly, positioning the listing, and navigating negotiations require an active, seasoned professional.

Have Questions About Your Local Neighborhood?

Navigating today's market requires localized insights tailored to your specific goals.

Reach out to our team today to discuss your buying or selling options!