San Diego's $1.1 Million 'Holding Pattern': Low Inventory Traps Buyers and Sellers Alike
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San Diego County's housing market has settled into what the Greater San Diego Association of Realtors is calling a 'holding pattern' — a phrase that captures the surface calm while obscuring the pressure beneath. The median sales price for single-family detached homes held at $1,099,500 in May 2026, essentially unchanged from April and March. The countywide median across all residential properties has now sat at $900,000 for thirteen consecutive months.
The inventory figures tell the more consequential story. Residential inventory has fallen for four consecutive months: down 12.4 percent in May year-over-year, 12.8 percent in April, 11.2 percent in March, and 15.4 percent in February. In North County, inventory is reportedly down nearly thirty percent compared to this time last year. The dynamic is self-reinforcing: sellers decline to list because they would re-enter the same expensive market as buyers, while buyers cannot clear the barrier of a 20 percent down payment on a home priced above one million dollars.
Mortgage rates in the low-to-mid six percent range — down roughly half a point from a year ago — have not been sufficient to break the standoff. The one segment showing movement is attached homes: condo and townhome sales were up four percent year-over-year in May, while detached home sales fell 1.9 percent, suggesting that buyers who can act are shifting toward more accessible price points.
The county's $93.1 million affordable and supportive housing allocation in the FY 2026-27 budget and the city's ADU reforms represent the policy levers local government is pulling to build supply at the lower end of the market. Whether those tools are adequate against a baseline median of $900,000 remains an open question — and the families who need affordable housing now face years of permitting and construction timelines before any new supply materializes.
The Tijuana sewage crisis adds a direct economic dimension to the coastal housing picture. Beach closures in Imperial Beach have suppressed revenue for businesses tied to tourism, fishing, and coastal recreation. The $25.6 million watershed protection allocation in the county budget is partly an economic calculation: every month the beaches remain closed represents losses that do not come back.