San Diego Housing Market Forecast for 2026

Updated September 2026

Whenever someone asks me for a San Diego housing market forecast, they're usually really asking one of two things.

Buyers want to know: should I wait, because prices are about to fall?

Sellers want to know: should I sell now, before something changes?

I get why people want a clean answer. It would make the decision so much easier. But housing forecasts just don't work that cleanly, and anyone who tells you otherwise is guessing.

I'm Jacob Menath, a real estate agent with Menath Real Estate Team in Alpine, California, helping buyers and sellers throughout Alpine and East County San Diego navigate major lifestyle transitions.

And when I look at the San Diego market, I pay a lot less attention to anyone's price prediction and a lot more attention to the actual forces moving the market right now.

Here's what those forces are pointing to.

The short answer

San Diego County's housing market right now looks slower and more balanced than the frenzy a lot of buyers remember from a few years ago. But it's still tight enough on supply that a major price collapse isn't something the current data supports.

In July 2026, San Diego County's median sale price was about $937,000, up 2.4% from a year earlier, according to Redfin. At the same time, active listings were down about 6% year over year, with roughly 2.8 months of supply, well below what's typical in a balanced market. The average 30-year fixed mortgage rate sat at about 6.54% in July, according to C.A.R.'s calculations based on Freddie Mac data, continuing to limit how many buyers can comfortably compete.

Put those pieces together and you get a market where:

Well-priced homes still move quickly, in under a month on average. Overpriced ones sit and get stale. Buyers may have more negotiating room on some individual properties, even as tighter segments of the market still attract strong competition. And different neighborhoods, price points, and property types are behaving in noticeably different ways from one another.

The forecast matters. But the specific property, the price point, and your own timeline usually matter more than the county-wide number.

Prices are still holding up, just not sprinting

San Diego home prices have slowed down considerably compared to the sharper run-ups of a few years back. But "slower" isn't the same as "falling."

In July 2026, San Diego County's median sale price was about $937,000, up 2.4% from a year earlier, according to Redfin. That's below the national growth rate of roughly 3% for the second month running, but San Diego remains one of the most expensive large counties in the country, and it's appreciated by roughly 60% since early 2020. The S&P Cotality Case-Shiller Index told a similar story: San Diego home values were up about 1.05% year over year in June 2026, essentially flat month over month.

The way I'd describe it to a client sitting across from me: price growth has slowed down a lot, but home values are still proving pretty resilient. That's a different story than the one making headlines every time someone predicts a crash.

Why supply is still doing a lot of the work

San Diego County had about 2.8 months of supply in July 2026, according to Redfin. Active listings were actually down about 6% from a year earlier, at just under 9,000 homes on the market, which helps explain why prices have remained relatively resilient despite affordability pressure.

This is one reason I get a little cautious when someone tells me prices "have to" come down because homes are too expensive. Affordability absolutely matters. It's probably the single biggest thing shaping buyer behavior right now. But price isn't set by affordability alone. It's set by the balance between how many buyers want in and how many homes are actually available.

When relatively few owners are listing, and buyers are still competing for the better properties in a given price range, that tends to keep some floor under prices even while overall demand cools off. High prices weaken demand. Limited supply supports prices. Right now, San Diego County has both of those forces pulling at the same time, which is part of why the market feels stuck in the middle instead of moving decisively in either direction.

Worth noting too, San Diego's inventory has grown substantially from its 2023 low of around 5,000 active listings. But it's still well below the pre-pandemic range of roughly 10,000 to 12,000, which is the more meaningful long-term comparison.

One signal I'm watching: pending sales

Here's something that doesn't always make the headlines. July's closed sales in San Diego County were up 8% year over year, the strongest gain since early 2025. But pending sales, the contracts being signed right now, were down about 7% over the same period, according to Redfin.

That gap matters because pending sales are more forward-looking than closed sales, which reflect deals that were struck weeks or months earlier. The strong July closings likely reflected a backlog of spring activity working its way through escrow, not necessarily fresh demand entering the pipeline. Fewer new contracts being written could mean softer closings by autumn.

That doesn't predict a downturn by itself. But it does suggest the market isn't moving in one simple direction, and it's exactly why I wouldn't build a forecast around any single headline number.

Mortgage rates are the other half of the equation

The average 30-year fixed mortgage rate was about 6.54% in July 2026, according to C.A.R.'s calculations based on Freddie Mac data, down modestly from 6.72% a year earlier but still elevated by recent standards.

Rates matter because nobody actually shops with the purchase price as their main number. They shop with the monthly payment in mind. On a San Diego-priced home, even a modest move in rates changes what a buyer can qualify for and what they're willing to offer.

That's why I tell buyers not to fixate only on where prices are headed. The bigger swing factor might be what borrowing costs do over the next year. San Diego doesn't need home prices to drop dramatically for buyer behavior to shift. A meaningful change in rates can do that on its own.

And there's a wrinkle worth sitting with: if rates do fall meaningfully, that's good news for your payment, but it could also pull some sidelined buyers back into the market at the same time. If inventory stays tight while that happens, competition can tighten right back up. The thing that helps your monthly payment can also increase the number of people bidding against you.

San Diego isn't really one market

This is probably the most important thing I try to get across, because county-wide numbers can be misleading if you take them too literally.

Nobody buys "the San Diego market." They buy one specific house, in one specific location, in one specific condition, at one specific price. Recent city-level data makes the point well. Over the three months ending July, La Mesa's median price was up about 6% year over year, while Santee was down about 2.5% and San Marcos was down closer to 4%. El Cajon and Chula Vista both posted modest gains in the low single digits. That's a wide spread for one county in the same stretch of months.

Alpine doesn't behave the same way La Mesa does. La Mesa doesn't move the same way Chula Vista does. A property on a couple of acres out east has a completely different buyer pool than a condo close to downtown. Even two homes in the same zip code can attract very different kinds of offers depending on lot size, updates, or road access.

Out here in East County, buyers are often weighing a different set of tradeoffs than someone shopping closer to the coast. Space versus commute. Larger lots and privacy versus fire insurance and well or septic considerations. Older, character-filled homes versus newer construction with fewer maintenance surprises. These aren't downsides, they're just realities that shape how a specific property performs, and they're not something a county-wide median price can tell you.

If you're looking at a rural or semi-rural property, or anything on a well or septic system, the county forecast is a useful backdrop. It is not a substitute for understanding your specific property and area.

Is a crash actually likely?

I wouldn't tell anyone a downturn is impossible. Nobody can honestly promise that, and I'd be skeptical of any agent who does.

But I also wouldn't assume a crash is coming just because San Diego is expensive. It's been expensive for a long time. A more significant downturn could be associated with some combination of rising inventory, weaker demand, employment deterioration, increased financial distress, or a broader economic shock. Those aren't predictions. They're simply some of the conditions worth watching.

Right now, what the current data shows is affordability pressure and slower price growth, alongside supply that's still fairly limited and a market Redfin currently characterizes as favoring sellers county-wide. That's a different setup than what typically precedes a real downturn.

Could prices fall in specific neighborhoods, or for specific homes? Sure. Individual properties sell below recent comparable sales all the time, especially if they're overpriced or need work. But turning "prices could soften somewhere" into "the market is about to crash" is a bigger leap than the current numbers support.

What I'd actually tell a buyer

I wouldn't tell someone to buy because I think prices are heading up. And I wouldn't tell them to wait because someone online is predicting a drop.

What I would walk through with a buyer is closer to this: how long do you realistically expect to stay in the home? What does the monthly payment actually look like, not just today's rate but a range of scenarios? What's your cushion if something unexpected comes up? What does inventory actually look like in the specific area and price range you're shopping, not the county average? And what's your alternative if you decide to wait, are you renting, staying put, or is there real cost to not moving?

The market is context. Your life is the deciding factor. A forecast should inform that decision, not replace it.

What I'd actually tell a seller

A market with modest, stable price growth doesn't mean every seller can name a price and expect to get it. Buyers today have more information than ever, and they're payment-sensitive. A home that buyers perceive as overpriced relative to its competition may sit while a well-positioned property nearby attracts attention much faster, sometimes in a matter of days.

For sellers, the more useful questions usually aren't about predicting next year's median price. They're about your actual local competition, the condition of your home relative to what's nearby, how your price compares to what's realistically selling, and how much flexibility you have on timing. A forecast tells you about the environment. Your pricing strategy tells buyers how your home fits into it.

A pattern I keep seeing

People want the forecast to make the decision for them. Buyers ask if they should wait. Sellers ask if they should list now. But the market doesn't hand everyone the same answer, because everyone's situation is different.

One buyer might be better off moving forward because they've found the right home and plan to stay for years, regardless of small price swings. Another might genuinely need more time to get finances in order. One seller might have a real, time-sensitive reason to move. Another has nothing but flexibility and can afford to wait for the right offer.

That's usually where I try to shift the conversation, from "what's the market going to do" to "what would actually have to happen for my decision to change." That second question tends to be a lot more useful than chasing a prediction nobody can guarantee.

Questions worth asking yourself

• Am I expecting the forecast to make this decision for me, instead of my own situation?

• How long do I actually expect to own this home?

• What happens to my plan if prices tick up a little? What happens if they soften a little?

• How sensitive is my monthly payment to a change in mortgage rates?

• Am I looking at county-wide numbers, or have I actually looked at my specific neighborhood and price range?

• What specific market change am I actually waiting for?

• Would that change improve one part of my situation while making another part harder? Lower rates but more competition, for example.

• If I'm selling, what does my real competition look like right now, not six months ago?

• If the market doesn't move the way I expect, does my decision still hold up?

That last one is probably the most important question on the list.

Frequently asked questions

Will San Diego home prices go down in 2026? They could, in certain neighborhoods or price ranges. But the most recent county-wide data doesn't point to a broad price decline. San Diego County's median price was still up 2.4% year over year as of July 2026.

Is the San Diego housing market going to crash? A downturn is always possible in any market, but current conditions don't establish that one is underway or imminent. Affordability remains a real challenge for buyers, while inventory continues to run below historical norms, which tends to support prices rather than undermine them.

Will San Diego home prices keep rising? Nobody can guarantee that, and any agent who does isn't being straight with you. The data shows slower price growth than during stronger appreciation periods, and pending sales softened in July even as closings were strong. Where things go from here depends on mortgage rates, inventory levels, employment, and buyer demand.

Is this a buyer's or a seller's market right now? It depends on how you're measuring it and which part of the market you're looking at. County-wide July data still showed relatively tight supply, homes moving in under a month, and strong competition for many properties, which is why Redfin currently characterizes San Diego County overall as a seller's market. But buyers may have more negotiating leverage on individual properties, particularly ones that are priced aggressively or need work. That's why I wouldn't label every San Diego neighborhood, property type, and price range with one market-wide term.

What happens if mortgage rates drop further? Lower rates would likely bring some sidelined buyers back in. If that happens while inventory stays limited, competition could pick back up, which is worth keeping in mind if you're waiting specifically for rates to fall before buying.

Should I wait for prices to drop before I buy? That depends entirely on your finances, your timeline, your housing needs, and what your alternative looks like if you don't buy. Waiting could mean lower prices, higher prices, different rates, or simply a different set of homes to choose from. A forecast alone shouldn't be the reason you wait or the reason you move forward.

The bottom line

So, what is the San Diego housing market forecast?

Right now, I'd describe it as slower, expensive, tight on supply, and still fairly resilient. San Diego County's median price was up 2.4% year over year in July 2026, even as pending sales softened and mortgage rates stayed elevated near 6.54%. Inventory remains limited relative to historical norms, down about 6% from a year earlier, which continues to give sellers leverage in much of the county even as buyers gain a bit more room on individual, less competitive properties.

Could prices soften in places? Yes, and some already have, San Marcos and Santee among them over the past few months. Could a drop in rates bring buyers, and competition, back quickly? Also yes. Could some neighborhoods and property types clearly outperform others? Almost certainly, La Mesa and Chula Vista have already been doing that this year.

The most useful San Diego housing forecast isn't a single price prediction. It's understanding which forces are pushing the market in each direction, and then deciding whether your plan still makes sense under more than one possible outcome.

The market is context. Your life is the deciding factor.

Jacob Menath is a real estate agent with Menath Real Estate Team in Alpine, California, helping buyers and sellers throughout Alpine and East County San Diego navigate major lifestyle transitions.

Menath Real Estate Team | Alpine, CA | Serving San Diego County