News Summary
San Diego has recorded a 0.61% decline in home prices for the first time in two years, reflecting a significant shift in the housing market. The median price for single-family homes now stands at $1 million, while the average sale price has decreased to $917,500. Home sales also saw a reduction of 1.4% year-over-year, attributed to affordability issues and high mortgage rates. Experts suggest that increasing inventory may lead to further price adjustments as potential buyers navigate a changing market landscape.
San Diego experienced a notable decline in home prices for the first time in two years, with a 0.61% decrease recorded on an annual basis, according to the latest S&P CoreLogic Case-Shiller Indices. This marks a significant shift in the housing market that has seen rising prices for an extended period, with the last year-over-year decrease noted in June 2023.
The Case-Shiller report indicates that while San Diego’s home prices have dipped, the U.S. housing market is also witnessing its slowest pace of price appreciation in two years, showing a modest 1.9% increase nationally. The report underscores the sluggish trend across many metropolitan areas in the 20-city index, highlighting that while the New York metro area saw a 7.03% increase annually, cities like Tampa experienced a 2.38% decline.
The dynamics in San Diego include a median home price of $1 million for single-family homes as of June, according to data from Attom Data Solutions. This places San Diego among the most expensive housing markets in the country. The average sale price within the county also reflected a decline, falling to $917,500, which indicates a 3.3% decrease from the previous year.
Home sales in San Diego also saw a reduction, with 2,019 homes sold in June, marking a 1.4% year-over-year decline. The volume of sales and the decrease in home prices can be attributed to several economic factors, including affordability issues and persistent high mortgage rates, which have deterred many potential buyers.
The 30-year fixed-rate mortgage averaged 6.58% in the last week of June, having decreased from a high of 7.04% in mid-January 2025. Despite these lowered rates, home sales remained sluggish. An increase in housing inventory has been noted, as homes are taking longer to sell—now averaging 29 days on the market, which represents a rise of 12 days compared to the previous year.
Experts suggest that this growing inventory might lead to further price drops in various markets as we progress through the year. It has been indicated that, in light of the current market conditions, potential buyers may find themselves in better negotiating positions due to a more favorable balance of supply and demand, especially as inventory increases.
The situation in San Diego represents a broader pattern seen across various metropolitan areas, with mixed indicators illustrating significant variability in price changes and buyer interest. For example, while San Francisco recorded a -1.98% decline, other regions like New York showed positive trends.
Historical context reveals that San Diego previously dominated the Case-Shiller index, ranking at the top with a 10.3% price increase year-over-year in April 2024. Comparatively, the current ranking puts San Diego at No. 17 in the index, marking its lowest performance since March 2023.
The anticipated shifts in the economy include speculation about a potential interest rate cut by the Federal Reserve, which could lower borrowing costs for prospective homeowners. Federal Reserve Chair Jerome Powell has indicated openness to this possibility, which might further influence mortgage rates and buyer activity in the market.
In summary, the latest data indicates that San Diego’s housing market is in a phase of adjustment, characterized by declining prices and slowing sales. As economic conditions evolve, potential buyers may face improved opportunities amidst the shifting landscape of home inventory and mortgage rates.
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Additional Resources
- San Diego Union Tribune
- Wikipedia: Housing economics
- Times of San Diego
- Google Search: San Diego housing market 2025
- NBC San Diego
- Google Scholar: San Diego housing market
- Redfin Blog
- Encyclopedia Britannica: Real estate
- 10 News
- Google News: San Diego housing market trends
Author: STAFF HERE SAN DIEGO WRITER
SAN DIEGO STAFF WRITER The SAN DIEGO STAFF WRITER represents the experienced team at HERESanDiego.com, your go-to source for actionable local news and information in San Diego, San Diego County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as Comic-Con International, San Diego County Fair, and San Diego Pride Festival. Our coverage extends to key organizations like the San Diego Regional Chamber of Commerce and United Way of San Diego County, plus leading businesses in biotechnology, healthcare, and technology that power the local economy such as Qualcomm, Illumina, and Scripps Health. As part of the broader HERE network, including HEREAnaheim.com, HEREBeverlyHills.com, HERECostaMesa.com, HERECoronado.com, HEREHollywood.com, HEREHuntingtonBeach.com, HERELongBeach.com, HERELosAngeles.com, HEREMissionViejo.com, and HERESantaAna.com, we provide comprehensive, credible insights into California's dynamic landscape.
