San Diego's Housing Market Finds Uneasy Footing — But Risks Loom
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San Diego's housing market is showing the first signs of equilibrium in years, though median prices remain near $900,000 to $950,000 countywide. Active inventory is up roughly 24 percent year-over-year, and median days on market have stretched to approximately 37 days in many areas — a marked shift from the pandemic era when homes sold within hours of listing.
Single-family homes remain firmly in sellers' territory, with supply still running 34 percent below its 10-year average. Attached properties such as condos and townhomes are seeing above-average inventory and modest price softness. East County continues to offer the most accessible entry points: median home prices in Santee, El Cajon, and Lakeside range from roughly $700,000 to $775,000, while La Mesa sits at a median of $1 million, with properties there still selling at 99.2 percent of list price.
Thirty-year fixed mortgage rates have settled in the low-to-mid 6 percent range, down nearly half a point from a year ago, bringing more buyers back to the market; rates are expected to ease gradually through the remainder of 2026. The San Diego Housing Commission has expanded several down payment assistance programs for the year. At the same time, the city is introducing new costs for residents: a monthly trash fee expected to generate $80 million annually and a planned charge for parking at Balboa Park, a facility that has historically been free to access.
In San Marcos, a separate redevelopment story is unfolding at a more human scale. One family is fighting to retain their land after being caught up in the major North City redevelopment, a project credited with reinvigorating downtown and helping the city meet housing production goals, but one that highlights the displacement costs large-scale development can impose on individual residents.
Whether the current market shift represents healthy normalization or the early stages of a deeper correction remains an open question. Analysts caution that mortgage rates in the mid-6 percent range remain historically elevated by recent standards, and San Diego's economy — heavily dependent on biotechnology, defense contracting, and tourism — could be vulnerable to changes in federal spending or broader economic headwinds. The signals to watch include whether price reductions become more common, days on market stretch consistently beyond 45 to 50 days, and whether new construction permit activity begins to pull back.