2025 San Diego Home Market Breakdown: Inventory, Prices and What to Expect in 2026

San Diego Real Estate Market Year‑End Recap 2025: What Buyers & Sellers Need to Know Heading Into 2026

As 2025 comes to a close, San Diego’s real estate market stands at a pivotal moment. After several years of rapid appreciation, tight inventory, and intense buyer competition, the market has shifted into a more balanced—but still highly desirable—environment. For buyers and sellers in the $1.5M single‑family home segment, 2025 delivered meaningful changes that will shape opportunities in early 2026.

This comprehensive year‑end recap breaks down the major trends of 2025, what they mean for you, and how to strategically position yourself for success in the year ahead.

🌤️ 2025 in Review: A Market Cooling Into Balance, Not Decline

San Diego’s housing market in 2025 didn’t crash, stall, or overheat. Instead, it normalized.

Inventory rose sharply, days on market increased, and prices softened slightly in some segments—yet demand remained strong, especially in the mid‑luxury tier around $1.5M.

Key 2025 Highlights

• Average home price single family in San Diego: $1.425M in Nov 2025, up 3% year‑over‑year
• Average home price peak (August 2025): $1.486M, down 2% from 2024 peak (April $1.505M).
• Average home price low (June 2025): $1.322M, up from 2024 low (January $1.26M).
• New Listings increased through November in 2025 by 869 homes versus same time period in 2024 (increase of 7%)
• Sales volume increased slightly YTD 2025 15,312 closings vs 15,255 for 2024.

For the $1.5M single‑family home market, these shifts created a more strategic environment—one where buyers gained leverage and sellers needed sharper pricing and presentation to stand out.

🏡 The $1.5M Single‑Family Segment: Still the Sweet Spot

While the countywide average $1.5M range remains one of the most active and resilient tiers in San Diego.

Why?

Because this price point captures:

• Coastal‑adjacent neighborhoods
• Top‑tier school districts
• Move‑up buyers with strong financial profiles
• Limited inventory and high lifestyle appeal

Even as the broader market cooled, the $1.5M segment held steady due to its built‑in demand drivers.

📉 Home Prices in 2025: A Gentle Correction, Not a Downturn

The data paints a clear picture: 2025 brought moderation, not depreciation.

This slight softening is healthy. It reflects:

• Higher inventory
• Longer days on market
• Buyers regaining negotiation power
• Sellers adjusting expectations

For $1.5M homes, the effect was subtle: fewer bidding wars, more price reductions, and a return to normal seasonal patterns.

⏱️ Days on Market: A Return to Normalcy

Homes in San Diego sold in 41 days on average in 2025, compared to 32 days the year before.

This signals:

• A more thoughtful buying process
• Less urgency
• More negotiation room
• A healthier pace for both sides

For sellers, it means pricing and presentation matter more than ever. For buyers, it means breathing room.

📊 Sales Volume: Slight Dip, Strong Demand

Sales volume dipped modestly:

• 602 homes sold in Nov 2025, down from 680 the year prior

This wasn’t due to lack of demand—it was due to:

• Higher mortgage rates
• More selective buyers
• A shift from urgency to strategy

The $1.5M segment remained active, driven by move‑up buyers, relocations, and equity‑rich homeowners.

🧭 Neighborhood Trends: Where the $1.5M Market Shined

While the search results didn’t provide neighborhood‑specific data, the $1.5M range typically thrives in:

North County Coastal

• Encinitas
• Carlsbad
• Solana Beach

North County Inland

• Poway
• Rancho Bernardo
• Escondido 
• Rancho Penasquitos

Metro San Diego

• North Park
• University Heights
• Mission Hills

Coastal South

• Pacific Beach
• Ocean Beach

These areas saw steady demand throughout 2025 thanks to lifestyle appeal, schools, and limited supply.

🧠 What Buyers Should Know Heading Into 2026

2026 is shaping up to be a year of opportunity—especially for buyers in the $1.5M range.

1. More Inventory = More Choice

With inventory levels rising, buyers can be more selective.

2. Prices Are Stabilizing

The slight softening in late 2025 suggests a more balanced 2026.

3. Negotiation Power Has Returned

Price reductions, seller credits, and contingent offers became more common in 2025.

4. Mortgage Rates May Ease

While forecasts vary, many analysts expect modest rate relief in 2026, which could boost affordability.

5. The $1.5M Tier Remains Competitive

Even with more inventory, this segment attracts strong, qualified buyers.

🧭 What Sellers Should Know Heading Into 2026

Sellers still hold advantages—but not the overwhelming leverage of 2021–2022.

1. Pricing Must Be Strategic

Overpricing leads to extended days on market.

2. Presentation Matters More Than Ever

Buyers expect move‑in‑ready homes at this price point.

3. Demand Is Still Strong

San Diego remains one of the most desirable markets in the country.

4. Equity Gains Are Significant

Even with slight 2025 softening, long‑term appreciation remains robust.

5. Early 2026 May Be a Sweet Spot

If rates drop, buyer activity could surge.

🔮 2026 Outlook: A Market Poised for Movement

Based on 2025 data, here’s what to expect in 2026:

1. Continued Inventory Growth

More sellers are expected to list as rates stabilize.

2. Price Stability With Mild Appreciation

Most forecasts predict modest growth—not spikes.

3. Strong Demand in the $1.5M Segment

Lifestyle buyers, relocators, and move‑up families will continue driving this tier.

4. More Balanced Negotiations

Neither buyers nor sellers will dominate—skill and strategy will.

5. A Healthier, More Predictable Market

2026 may be the most “normal” year San Diego has seen since 2019.

📌 Final Thoughts: Your Move in 2026

Whether you’re buying or selling a single‑family home around $1.5M, the San Diego market remains one of the strongest long‑term investments in the country. With inventory rising, prices stabilizing, and demand holding firm, 2026 offers a rare window of opportunity for both sides.