A Tale of Two Markets: Single-Family Strength Masks Condo Distress
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San Diego's real estate market is bifurcated in ways that matter enormously depending on what kind of property an owner holds. The countywide median for existing single-family home sales reached $1.099 million in July, up 5.7 percent year-over-year. Inventory remains tight and days on market are relatively short, even as sales volume fell 6.7 percent month-over-month and the 30-year fixed mortgage rate sits at 6.69 percent. For single-family homeowners, constrained supply is holding values elevated despite affordability pressure suppressing transaction volume.
The condo and townhome market tells a starkly different story. Older condos and townhomes in some submarkets are down 10 to 15 percent from their 2022 peaks — on a unit that peaked at $600,000, a 12-percent decline represents $72,000 in lost equity. HOA fees in some buildings have surged 60 to 70 percent over the same period, and special assessments as high as $100,000 per unit have been reported in buildings with deferred maintenance and aging infrastructure. Condo owners are simultaneously absorbing declining asset values and rising monthly carrying costs — a financial squeeze that does not surface in headline median figures dominated by single-family transactions.
Commercial and industrial real estate adds a third layer. Industrial vacancy reached 7.06 percent in Q2 2026, up from 6.91 percent the prior quarter, with net absorption turning negative at minus 236,000 square feet — a significant reversal from positive 1.1 million square feet the previous quarter. Office vacancy holds at 13.4 percent, below the national average but elevated in absolute terms. The reversal in industrial absorption suggests the distribution and logistics demand surge that carried the sector through 2023 and 2024 is losing momentum.
On the development side, Cresleigh Homes is reportedly planning a 37-story residential tower among the tallest in the downtown core, with no confirmed unit count or timeline yet. Live Nation's plan to convert the 102-year-old Wonder Bread building into a mid-size music venue is moving forward — a use that fits the building's scale and fills a documented gap in San Diego's live music infrastructure between clubs and arenas. The Midway Rising project remains complicated: the City Council repealed Measure C on August 25th under a court order, and State Senator Akilah Weber Pierson is expected to lead a legislative maneuver to exempt the project from standard CEQA review, a move that is both politically and legally contentious given the project's coastal zone location.