San Diego has more homes for sale than it did earlier this year. On paper, that should mean falling prices, less competition, and significantly more leverage for buyers, but that’s not what’s happening everywhere.

Some San Diego homes are still attracting multiple offers almost immediately. Others are sitting on the market for weeks, lowering their prices, or offering concessions to close the deal.

The difference comes down to more than the total number of homes for sale. Property type, condition, price, and location are creating several distinct markets within San Diego County.

That is why broad headlines about the San Diego housing market can be misleading. Buyers and sellers need to understand what is happening with the specific homes and neighborhoods relevant to their plans.

Is San Diego a Buyer’s or Seller’s Market?

San Diego is not entirely a buyer’s market or a seller’s market. It depends on what you are buying or selling.

At the time of this analysis, San Diego County had more than 5,500 active listings but remained below three months of housing supply overall. Single-family homes were closer to 2.5 months of supply, while condos and townhomes were closer to 4 months.

Those figures point to two different experiences. Buyers looking for condos and townhomes may have more options and more room to negotiate. Buyers searching for updated single-family homes in desirable neighborhoods may still face limited inventory and strong competition.

The broader inventory number does not show those differences. An increase in total listings doesn't necessarily mean a buyer suddenly has dozens of suitable homes to choose from.

Once buyers narrow their search by price, neighborhood, school district, home size, and condition, the available inventory can become much smaller.

Why Are Some San Diego Homes Still Getting Multiple Offers?

The strongest competition often centers on well-priced, move-in-ready homes.

A recently remodeled home listed by the McGovern Schwarz Group on Bavarian Drive in Rancho Peñasquitos received 21 offers. That level of competition may sound surprising in a market with higher mortgage rates and increased inventory, but it reflects what many buyers want right now.

With home prices and borrowing costs already stretching budgets, buyers may be reluctant to take on a major renovation after closing. An updated home with a newer roof, modern kitchen, attractive flooring, and well-maintained systems can stand out immediately.

Meanwhile, another property nearby with an outdated kitchen, aging roof, or worn flooring may sit on the market much longer.

Even two homes on the same street can have completely different outcomes. One may generate a bidding war because its price and condition match buyer expectations. The other may require a price reduction or seller concession because buyers are calculating the cost of improvements on top of an already substantial monthly payment.

Are San Diego Home Prices Going Down?

More inventory does not automatically lead to lower prices across the entire San Diego housing market.

Prices may soften in certain neighborhoods or property categories while remaining stable—or even rising—in others. Desirable coastal communities, updated single-family homes, and properties in highly requested school districts may continue to perform differently from older condos or homes requiring significant work.

This is one reason waiting for a major countywide price drop can be risky.

No one can predict exactly what home prices will do next year. However, buyers waiting solely because inventory has increased may watch desirable homes sell while expecting a broader decline that never reaches their preferred neighborhood or property type.

The more specific the home search becomes, the less useful the countywide numbers become.

Why Haven’t Higher Mortgage Rates Caused a Bigger Price Drop?

At the time of this writing, the average 30-year fixed mortgage rate was around 7.4%, reducing purchasing power and increasing monthly payments for San Diego buyers.

Higher rates have slowed demand, but they have also discouraged existing homeowners from selling.

Many San Diego homeowners refinanced or purchased when mortgage rates were between 2% and 3%. Moving today could mean giving up that rate, purchasing a more expensive home, and taking on a substantially higher property-tax bill.

That creates a powerful incentive to stay put.

A homeowner who wants another bedroom, a larger yard, or a different neighborhood may decide that remodeling the current home makes more financial sense than moving. The owner may be able to sell but may not see enough benefit to justify the higher monthly cost.

This mortgage-rate lock-in effect restricts the supply of homes that might otherwise come to market. As a result, higher rates can reduce buyer demand and available inventory at the same time.

How Do Property Taxes Affect San Diego Homeowners Who Want to Move?

For longtime homeowners, moving costs involve more than the new mortgage rate.

Under Proposition 13, a homeowner who purchased years ago may have a taxable value that is significantly lower than the home’s current market value. Buying another property generally means being assessed based on the new purchase price.

That can create a much higher property-tax bill.

Some California homeowners may qualify to transfer their existing property-tax base under Proposition 19. Eligibility generally includes homeowners age 55 or older, people with qualifying disabilities, and certain disaster victims.

The rules are specific, and tax consequences vary from one homeowner to another. Anyone evaluating a move should speak with a qualified tax professional and review the numbers before deciding.

Where Do San Diego Buyers Have More Negotiating Power?

Buyers are most likely to find leverage when a property has been overlooked by the rest of the market.

• Homes that have been listed longer than the neighborhood average
  • Properties requiring cosmetic updates
  •  Listings with an unfavorable initial price
  •  Condos or townhomes with higher HOA dues
  •  Homes in areas with more available inventory
  •  Properties returning to the market after a canceled transaction
  •  Sellers with a specific relocation or closing timeline

The average San Diego home may go pending within several weeks, but homes that need work can remain available longer.

A dated kitchen, older flooring, or unappealing paint may turn away buyers who want something turnkey. For a buyer willing to make gradual improvements, that same home may provide an opportunity to negotiate the price, repairs, closing costs, or a financing credit.

The key is distinguishing cosmetic issues from expensive structural or system-related problems. A dated bathroom differs greatly from a failing roof, foundation concerns, or substantial water damage.

Are Coastal San Diego Homes More Competitive?

Many coastal North County communities continue to attract strong demand because supply is limited and buyers place a premium on proximity to the ocean, lifestyle, and location.

Inland markets may offer more choices or negotiating opportunities, particularly when a home needs updating or has been on the market for an extended period.

That does not mean every coastal property will sell quickly or every inland seller will negotiate. It means buyers need to examine the market at the neighborhood level.

The market in Encinitas may behave differently from the market in Escondido. Carmel Valley can look different from Rancho Bernardo, and a turnkey home in Rancho Peñasquitos can perform very differently from a dated home only a few blocks away.

San Diego is made up of dozens of local markets, each with its own inventory, price points, and buyer demand.

Can Buyers Ask for Seller Concessions?

Seller concessions have become more common as buyers deal with higher monthly payments.

A concession may be used toward eligible closing costs, repairs, or a temporary or permanent mortgage-rate buydown. The amount a buyer can use depends on the loan program, occupancy type, down payment, and specific transaction costs.

Buyers should speak with their lender before requesting a credit. A credit toward a rate buydown may be more valuable to one buyer, while another may benefit more from help with closing costs or repairs.

Are Condos and Townhomes a Better Opportunity Right Now?

Condos and townhomes may give San Diego buyers an opening that is harder to find among detached homes.

Some buyers remove attached properties from their search after adding HOA dues to the monthly payment. Insurance costs and rising association expenses have also placed pressure on some HOA budgets.

That can reduce the competition for certain properties.

Buyers who are comfortable with the monthly dues may have more room to negotiate the purchase price or request a seller credit. However, a lower price does not automatically make a condo or townhome a good purchase.

Before buying, review:

• Current HOA dues
  • The association’s reserve funding
  •  Recent or planned special assessments
  •  Insurance coverage
  •  Owner-occupancy levels
  •  Rental restrictions
  •  Pending litigation
  •  Maintenance responsibilities

Certain North County townhomes may also be worth considering as investment properties, including options in 4S Ranch. You need to evaluate the purchase price, HOA dues, rental rules, and realistic rental income together.

What Should San Diego Sellers Do in This Market?

The most common seller mistake is pricing a home based on what the overall San Diego market appears to be doing.

Countywide averages combine coastal estates, entry-level condos, remodeled homes, fixer-uppers, and properties in very different communities. They do not determine what a specific buyer will pay for a particular home.

A seller’s pricing strategy should consider:

• Recent sales of comparable nearby homes
  • Current competing listings
  •  The home’s condition and updates
  •  Lot, location, and floor-plan differences
  •  Current buyer activity in that price range
  •  How quickly similar homes are going under contract

Pricing a dated home as if it has already been remodeled can cause buyers to pass before negotiations begin. After several quiet weekends, the seller may reduce the price simply to regain attention.

Starting closer to the home’s actual market position is usually more effective than chasing the market through repeated price reductions.

Should Sellers Remodel Before Listing?

Most sellers do not need to complete a major renovation before putting their home on the market.

Smaller improvements can have a great impact, including:

• Fresh interior paint
  • New or professionally cleaned carpet
  •  Updated light fixtures
  •  Minor landscaping improvements
  •  Basic repairs and deferred maintenance
  •  Professional cleaning
  •  Thoughtful staging

The goal is not necessarily to make the property look brand new. The goal is to reduce the number of immediate expenses buyers start adding up as they walk through the home.

If a known repair will affect the sale, the seller may decide to complete it or offer a credit. That can be more effective than allowing the property to sit and reducing the price later.

What Does the Current San Diego Housing Market Mean for Buyers?

Buyers have more leverage than they did during the market's most competitive years, but that leverage isn't evenly distributed.

A buyer may be able to negotiate aggressively on a dated condo that has been listed for six weeks. The same strategy may not work on an updated single-family home that received multiple offers during its first weekend.

Before making an offer, buyers should look at:

• Recent comparable sales
  • Current competition for the home
  •  Time on market
  •  Previous price reductions
  •  Property condition
  •  Seller timing and motivation
  •  Available financing strategies
  •  The full monthly cost, including taxes and HOA dues

The best opportunity may not be the least expensive home. It may be the home where the price, condition, competition, and financing options align most favorably.

What Does the Current Market Mean for Sellers?

San Diego sellers can still achieve strong results, but buyers are more selective.

Homes that are appropriately priced, well presented, and easy to move into can attract immediate attention. Homes that feel overpriced for their condition may sit even in desirable neighborhoods.

Sellers should prepare for buyers to compare every visible repair and outdated feature against the cost of other available homes.

A successful sale begins with understanding how buyers will position the property against its direct competition—not against a countywide median or a neighbor’s sale from a different market.

The San Diego Housing Market Is Really Several Markets

San Diego does not move as one uniform housing market.

Detached homes behave differently from condos. Coastal communities behave differently from inland neighborhoods. Turnkey homes behave differently from properties that need work.

That is why the market can appear contradictory. Inventory can rise while desirable homes still receive multiple offers. Mortgage rates can reduce demand while the lock-in effect limits supply. Buyers can gain leverage in one segment while continuing to compete aggressively in another.

The most useful question is not simply, “How is the San Diego housing market?”

It is: “What is happening with the type of home I want to buy or sell in the neighborhood and price range that matter to me?”

At the McGovern Schwarz Group, we can help you review homes that are selling, listings that are sitting, and where buyers or sellers may have an advantage.

Thinking about buying or selling in San Diego? Contact the McGovern Schwarz Group for personalized and strategic real estate help!

Frequently Asked Questions

Is San Diego currently a buyer’s market?
San Diego isn’t a uniform buyer’s market. Buyers generally have more leverage with homes that need work, properties that have been listed longer, and some condos and townhomes. Updated single-family homes in desirable neighborhoods can still receive multiple offers.

Are San Diego home prices expected to fall?
No one can reliably predict future prices. Rising inventory may place pressure on certain parts of the market, but limited supply and continued demand can support prices in other neighborhoods and property categories.

Why are San Diego homeowners not selling?
Many homeowners have mortgage rates between 2% and 3%. Selling may require them to purchase at a significantly higher rate and take on a larger property-tax bill, making remodeling or remaining in place more appealing.

Can buyers negotiate in the San Diego housing market?
Yes, particularly when a home has been on the market for an extended period, needs updates, or is competing with several similar listings. Buyers may be able to negotiate the price, repairs, closing costs, or an eligible financing credit.

Are condos and townhomes easier to buy than detached homes?
In some San Diego communities, condos and townhomes have more available inventory and less competition than detached homes. Buyers should still evaluate HOA finances, insurance, special assessments, rental restrictions, and the total monthly payment.

Do turnkey homes still receive multiple offers in San Diego?
Yes. Well-priced, move-in-ready homes in desirable neighborhoods can still attract significant competition, even with higher inventory and elevated mortgage rates.

Should San Diego sellers renovate before listing?
Not necessarily. Fresh paint, flooring, cleaning, landscaping, staging, and basic repairs may provide more practical value than a major renovation. The best improvements depend on the home’s condition and direct competition.

Why do San Diego housing statistics seem contradictory?
Countywide statistics combine different neighborhoods, property types, conditions, and price points. A competitive market for updated detached homes can exist at the same time as a slower market for dated condos or overpriced listings.