San Diego's Housing Market Splits in Two as Fanita Ranch Ruling Clouds Regional Supply
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San Diego County's housing market is telling divergent stories depending on property type. Single-family home inventory runs 34 percent below its 10-year average, sustaining seller's-market conditions, while condos and townhomes face above-average supply and softening prices — a split that reflects both shifting buyer preferences and the constraints of financing at current price levels. The countywide median home value sits at approximately $989,768, down roughly 3.4 percent over the past year according to national data, though some forecasts project moderate appreciation of 2 to 4 percent through late 2026, potentially pushing the median past $1 million.
The inventory picture grew more complicated last week when both San Diego Superior Court and the Fourth District Court of Appeal struck down Santee's approval of the Fanita Ranch development — a 3,008-home project on 2,638 acres that has now been rejected by courts five times since it was first proposed in 1999. The appellate court found that Santee had 'undermined the state's system of land use regulation' by attempting to increase density without prior voter approval as required under Measure N.
An environmental coalition — the Center for Biological Diversity, Preserve Wild Santee, the Endangered Habitats League, and the California Chaparral Institute — argued that building on land that has historically burned 65 times poses unacceptable wildfire risk. That argument carries added weight given the region's ongoing vulnerability to fire, though housing advocates note that blocking 3,008 units deepens a regional shortage that state-mandated housing targets cannot simply absorb. Santee will need to identify alternative development sites or face potential state intervention in local land use decisions.
The San Diego County Housing Authority is set to consider $293.7 million in fiscal year 2026-27 appropriations at a hearing Wednesday, and the County's broader budget includes $93.1 million for affordable housing development — significant sums that nonetheless fall well short of the scale of the regional shortage. Analysts note that the city of San Diego's own $118 million structural deficit is partly a downstream consequence of housing costs consuming an outsized share of residents' income, reducing taxable spending on goods and services.