San Diego Real Estate Market Update & Fall/Winter Forecast

The San Diego real estate market is a unique beast. It behaves much differently than the national headlines would have you think, and varies widely by location and housing type. 

In this post, I'm breaking it all down: what actually happened this year so far, which zip codes have had the strongest and weakest price growth across the City of San Diego, North County, and the 2-4 unit market, and where I think things are headed as we move into fall/winter and on into 2027. 

It's a long one, so jump to whatever's most relevant to you using the links below or keep reading for the entire San Diego real estate market update: 

• Biggest Factors Driving the Market in 2026 So Far
• Three Years of "Stagnant" That Wasn't (For Detached Homes)
• Why Attached Homes Haven't Kept Pace: A Word on HOAs
• Zooming In On Zip Codes: Where the Real Story Lives
• Top & Bottom 5 Zip Codes YTD: City of SD
• Top & Bottom 5 Zip Codes YTD: North County
• Top & Bottom 5 Zip Codes YTD: City of SD 2-4 Unit Properties
• Neighborhood Patterns, Zoomed Out
• Macroeconomic Factors Driving the Market into Fall/Winter
• Advice for Buyers this Fall/Winter
• Advice for Sellers this Fall/Winter
• Forecast For The 2027 San Diego Real Estate Market

Affordability is the biggest factor affecting the market. While interest rates keep climbing with seemingly no end in sight, median detached home prices in San Diego County recently hit an all-time high, a one-two punch for both buyers and sellers.

We started off the year optimistic that the affordability challenges of the past three years would finally ease. Rates hit 5.99% on February 27, 2026, the day before the war in Iran started, which seemed like a miracle. Unfortunately, the resulting inflation pressure and market uncertainty from the war quickly drove rates back up, and they topped 7% for the first time this year just a few days ago. 

As a result, many buyers have stayed on the sidelines. Sellers who priced their homes based on yesterday's economy have felt the pain of listings that sit and either never sell, or sell for much less than they should have. 

At the same time, the market continues trending in a healthy direction and sellers who price for the current market are selling relatively quickly.

The inventory of detached homes available for sale countywide is down 20.7% year-over-year as of August (putting upward pressure on prices because there is simply not enough supply), and average days on market is only 35. The attached (condo/townhome) market is moving slower but still experiencing gains. The number of attached homes countywide sold year-to-date is up 3.5% year-over-year, and average days on market is only 44. (Source: San Diego MLS Monthly Indicators Report)

Something I've found striking in the market data for San Diego County: despite being in a "stagnant" market for the past 3 years, detached homes have gained over $100,000 in value over these three years. This amounts to a 10.4% increase in value, which is healthy and sustainable price growth. 

While many buyers have been too nervous about the economy to get off the fence, those who took the leap and were able to purchase a detached home have been rewarded. If you've been telling yourself it's not a good time to buy, I'd encourage you to run the actual numbers before you talk yourself out of it again, especially as we head into the fall/winter, when home prices in San Diego go through a seasonal dip and buyers may find some really good negotiation opportunities (more on that in my advice for buyers section).

The equity story looks very different for owners in HOA communities.

A lot has been going on in HOA communities. Many have been facing serious financial deficits and have had to hit homeowners with special assessments in the tens of thousands of dollars range just to keep up on required maintenance and repairs. I published a previous article about why this is happening and how to protect yourself if buying a home in an HOA. 

Due to these financial pressures and rising HOA dues, home values in HOA communities in San Diego County have remained essentially flat (literally the same median price in August 2026 as August 2023):

One positive development to this story is that new lending guidelines went into effect on August 3rd for obtaining a loan in an HOA community, and HOAs are now going to have to tighten up their finances in order for the complex to qualify for conventional financing. 

That's right. Not only does the buyer have to qualify for the loan, but the HOA complex itself now has to qualify for the loan. I published another article going into more detail on these new rules and what sellers in HOAs should do to ensure a smooth home sale.  

This should push HOAs to get their finances in order and hopefully the prevalence of outsized special assessments will soon be behind us, and homes in HOAs will start gaining equity. 

Still, homes in HOAs represent compelling entry level price points for many buyers, so I wouldn't completely discourage people from buying in an HOA if they can afford it, so long as you do thorough due diligence on the HOA and avoid purchasing into an HOA that hasn't turned its finances around yet. 

If county-level data gives you the mood of the room, the zip codes are the key players. Some are high profile, some are up and coming, while others are more average. 

Zip code data is from the San Diego MLS, with median prices year-to-date as of the end of August, and percentage changes year-over-year from last August's year-to-date figure. 

Pacific Beach outperforms the market with a whopping 14.2% gain in detached home values year to date. People will always want to live at the beach, which is why I think this is also one of the best markets for investing in rental property (check the 2-4 unit numbers in the section below, PB is also in the top 5 there). 

Note: the number of homes sold is included because smaller sample sizes can skew statistics. In this case, 92101 (downtown) was excluded from this list because only 3 detached homes were sold YTD and it did not represent a true market trend. 

These are all great zip codes and I would see these price corrections as a great opportunity to get a deal on a great home while the dip lasts. 

Once again, the coastal areas lead the charge with both Ocean Beach and Pacific Beach in the top 5. Demand is strong at the beach, especially when condos represent a more manageable entry price point, like in Ocean Beach. I recently published an article about why I think OB is one of the strongest markets in San Diego. 

Note: Encanto and San Ysidro were excluded from this table due to small sample size. 

Attached homes are pulling back harder than detached in several of these same neighborhoods, North Park especially, which is a good reminder that condos and townhomes are more sensitive to financing costs since so many of those buyers are stretching for their first purchase. 

North County's luxury coastal zips are running hot this year, with Del Mar's 30% gain leading the entire county. Keep the sample sizes in mind, though. Rancho Santa Fe only had 16 sales year-to-date, so a handful of high-end transactions can swing the median a lot more than in a high-volume market like Poway. 

Even a resilient market has its soft spots, and this year that includes two different Rancho Santa Fe zip codes on opposite ends of the list, 92091 near the top and 92067 near the bottom, which is a good example of why zip-code data can still mask big swings between individual streets and price points. Otherwise this list is mostly mild, single-digit corrections rather than a market in real trouble, which lines up with what detached homes are doing countywide. 

Note: Rancho Santa Fe 92067 was excluded from this list due to small sample size.

These attached numbers need a bigger grain of salt than the detached tables above. Several of these zips, like Escondido West with only 7 condo sales year-to-date, have such thin volume that one or two unusual transactions can swing the median by double digits. I'd treat this as a reason to dig into the specific complex before drawing conclusions, not as a verdict on the whole submarket. 

House hacking remains a great way to overcome affordability challenges, and more owner-occupants are buying 2-4 unit properties than ever. These properties qualify for normal residential financing with as little as 3% down, and your tenants help pay your mortgage. If you are curious about this strategy, you can learn more about house hacking here.

The 2-4 unit market has some of the thinnest sample sizes on this whole page, and Bay Park's 41.3% jump on just 6 sales is a perfect example of why. What I'd take from this table isn't the exact percentages so much as the pattern: Pacific Beach shows up as a top performer here too, reinforcing that it's one of the strongest markets in San Diego right now. And every zip code on this list except PB is being driven by house hackers, with median prices that make the financials work.  

It might look like a contradiction that Ocean Beach shows up here after I called it one of the strongest markets in San Diego earlier in this post, but that's specific to the 2-4 unit market with only 21 sales year-to-date, not the broader OB market for single-family and condo buyers. With sample sizes this small across the whole bottom 5, I wouldn't read too much into these declines. They're more a function of thin volume than any of these neighborhoods actually losing value. 

The pattern I'm noticing is that the zip codes with the strongest price growth this year tend to be coastal, centrally-located, or otherwise land-constrained, like Pacific Beach, Hillcrest, Del Mar and Cardiff. 

The softer zip codes tend to be more suburban and inventory-rich, where buyers simply have more options and room to negotiate, like San Carlos, Del Cerro and Rancho Penasquitos.   

The Federal Reserve is still fighting inflation, and that's one of the key forces pushing mortgage rates higher. In his August speech at Jackson Hole, Fed Chairman Kevin Warsh acknowledged that housing is one of the areas of the economy feeling the most strain from higher interest rates:

"Certain sectors, like housing and agriculture, are showing strains. But, on balance, I would be hard pressed to describe broad financial conditions as restrictive."

At the same time, inflation remains well above the Fed's 2% target. Warsh reported that the Fed's preferred inflation measure was running at 3.7% over the prior 12 months, and made it clear the Fed isn't ready to declare victory yet:

"We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Otherwise, we have work to do." (You can read Warsh's full Jackson Hole remarks here.) 

Before last week's updated inflation reading, the question of whether the Fed will raise the short term interest rate at their meeting this week was a coin toss, but now experts think there's a 90% chance that the Fed will raise rates 0.25%. 

This doesn't translate directly to mortgage rates, and rates could actually rally down a little bit if the market views the Fed's actions as effective to combat inflation. But, there's another development happening behind the scenes. 

Long-term interest rates have become expensive not only for homeowners and businesses, but also for the federal government, which now has to refinance an enormous amount of debt at today's higher rates. 

In August, the U.S. Treasury announced it will more than double the size of certain buybacks of longer-term Treasury bonds (details on the Treasury's announcement here). Here's why that matters to a San Diego homebuyer: mortgage rates track very closely to the 10-year Treasury bond yields. When demand for Treasury bonds increases, their prices generally go up and yields fall, so increased Treasury purchases of longer-term bonds could put some downward pressure on longer-terms yields, which could in turn move mortgage interest rates lower. 

The rate environment remains stuck in a tug-of-war caused by an economy that's holding up reasonably well and inflation that remains high, but this development from the Treasury gives policymakers another reason to want long-term borrowing costs to remain manageable. But the main key to lower rates will continue to be getting inflation under control and an end to the war in Iran. 

Home prices in San Diego go through a seasonal dip every fall/winter, and despite current interest rates, there is an incredible amount of opportunity between now and the end of the year to negotiate lower home prices and seller concessions like closing cost credits and interest rate buydowns. 

The pattern is undeniable. Competition lessens, as many buyers drop out of the market to focus on the school year and the holidays. Top that with the uncertainty many buyers are feeling, it's almost like getting a great deal is ripe for the picking. As Warren Buffett's famous investing strategy goes: "Be fearful when others are greedy, and greedy when others are fearful." Translation: Look for bargains when others are not buying.  

When and if rates drop below 6%, an enormous amount of pent-up demand will jump back into the market, and competition will drive prices up, effectively counterbalancing any monthly savings you'd enjoy from lower interest rates.

One smart rule for investing in the current market is to make sure you plan to stay in place for at least 5 years, to ride out any short-term swings in the market.

And of course, make sure your mortgage payment is something you can manage comfortably at today's rates. Don't rely on the assumption that you'll be able to refinance next year. Think about it this way: If you can comfortably afford the payment today and you're able to buy the right property at a favorable price during a slower market, you already have a deal that works.

Refinancing in the future will just be a bonus. 

If you're selling this fall or winter, price for the reality of September and October, not for June. There are fewer buyers competing right now than there were earlier in the year, financing costs are higher, and normal seasonal patterns put downward pressure on price this time of year no matter what rates do.

When I'm advising a seller, I pay far more attention to where the market is likely headed over the next 60 to 90 days than to where it's been over the last 60. I lean conservative: price toward the lower end of the comp range to invite competition. This is always the best way to drive price up: let the competition in the market do it for you.  

The volatility in the current market only raises the risk of an overpriced home sitting unsold, which always results in lower net proceeds in the end. 

Some sellers then ask whether they should just wait until next year. I don't have a crystal ball. Last week, it was a coin flip whether the Fed would raise rates at all this week. Now it's a 90% probability. Predicting where we'll be next February, March, or April with the information we have today is also a coin flip.

What I do know is that certain zip codes, and certain detached homes, are meaningfully outperforming the rest of the market, so the right move is genuinely property-specific. You can absolutely have a successful sale in this market, and there are real buyers out there. They simply have more room to be selective and to negotiate concessions, whether that's closing costs or a temporary rate buydown.

My advice: don't treat that defensively. Use it as a marketing tool instead. A $10,000 credit toward closing costs or a rate buydown is something a buyer is likely to ask for anyway. Offering it up front brings more buyers through the door and creates the competition that actually drives up price, rather than negotiating it away one offer at a time. 

Nobody, including the Federal Reserve, can predict where mortgage rates or home prices will be next year. But there are longer-term forces worth paying attention to.

San Diego still has a fundamental housing supply problem, which continues to drive up prices despite affordability challenges, and high construction and financing costs right now are making it extraordinarily difficult to build new housing. 

We also still have the lock-in effect from homeowners who refinanced or purchased when mortgage rates were historically low, exacerbating the supply issue.  

In my view, the market will continue the patterns we've seen so far this year of slow and steady growth. For sellers, pricing correctly will matter more than it ever has, because affordability is a real challenge and buyers are stretched thin.

For buyers, this fall/winter represents a real opportunity to get a good deal before the 2027 spring market picks up. And in this high inflationary environment, owning a scarce asset like San Diego real estate with responsibly structured, long-term fixed-rate financing can be a powerful wealth-building tool.

If you're thinking of buying, selling, or investing anywhere in San Diego County before the end of the year, the zip code you're in matters more than any headline you'll read. Drop your zip code in the comments below and I'll send you a detailed report on what's happening in your neck of the woods. 

Prospective buyers and sellers can download my detailed Fall/Winter 2026 Buyer and Seller Guides using the buttons below. 

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