Only 15% Can Afford a San Diego Home: What Sellers Need to Know

The Affordability Crisis by the Numbers

The data paints a stark picture of San Diego's housing market. As of October 2025, the median home price stands at $985,092—a figure that's 8.7 times the median household income of $112,933. This crisis affects every neighborhood from Pacific Beach to La Jolla. To put this in perspective, the U.S. median home costs just 5 times income nationally, meaning San Diego is nearly double the national affordability ratio.

This disparity hasn't existed for 25 years. Back in fall 1997, San Diego homes cost 4.3 times income, close to the national level of 3.6 times. The county briefly touched an even worse ratio—10 times income—during the post-pandemic housing rush in spring 2022.

According to housing researcher Andy Walden, the average San Diego household must now dedicate 51% of monthly income to mortgage principal and interest. This makes San Diego the third-highest burden among 100 metro areas nationwide, behind only Los Angeles/Orange County (62%) and San Jose (53%).

The National Association of Realtors' Housing Affordability Index has plummeted to 92.7 in Q2 2025, down from 101.8 in Q1 and 169.9 as recently as 2020. An index value below 100 indicates that a family with median income doesn't have enough to qualify for a mortgage on a median-priced home. The historic norm of 130—the median value since NAR began tracking in 1989—seems impossibly distant.

What This Means for Homeowners Who Need to Sell

If you're planning to sell your San Diego home, the 15% affordability rate isn't just a statistic—it's a practical reality that affects your sale timeline, certainty, and stress level.

The Shrinking Buyer Pool

When only 15% of San Diego residents can afford a median-priced home, your pool of qualified buyers has never been smaller. This doesn't mean homes aren't selling, but it does mean you're competing for a limited number of financially qualified purchasers.

In September 2025, only 29% of homes sold above asking price, down dramatically from 71% in April 2022. For more context on this shift, see our analysis of how San Diego home prices fell for the 4th straight month. Year-to-date sales through September totaled just 20,504—putting San Diego County on track for one of its slowest home sales years in history.

Longer Days on Market

While the median time to pending remains at 17 days according to recent data, this masks significant variation based on price point, condition, and location. Homes that would have sold in days during the pandemic boom now sit for weeks or months, particularly in the mid-market and entry-level segments where affordability constraints hit hardest.

Economist Lisa Sturtevant put it simply: "Affordability is the biggest constraint in the market right now."

Financing Fall-Throughs Are a Growing Risk

Perhaps the most stressful impact of the affordability crisis is the increased risk of financing contingencies falling through. When buyers are stretching to their absolute limit to qualify, any change in their financial situation—a job loss, credit score drop, or appraisal coming in low—can torpedo the deal.

With 30-year fixed mortgage rates hovering around 6.30% in late 2025, lenders are scrutinizing applications more carefully. Buyers who were pre-approved months ago may no longer qualify when rates tick upward or their debt-to-income ratio shifts.

For sellers, this creates a painful scenario: you've taken your home off the market, potentially turned down other offers, and invested weeks or months into a transaction, only to have it collapse at the last minute. Then you're back to square one, relisting in a market that may have shifted further against you.

When Cash Buyers Provide Certainty

This environment has made cash buyers increasingly attractive, particularly for sellers in specific situations:

• Inherited Properties: When you inherit a home you can't afford to keep (or don't want to), the last thing you need is a 90-day traditional sale with financing risks. Cash buyers can close in 7-14 days.
• Divorce Situations: When neither party can afford to buy out the other, and you need a clean break quickly, cash sales eliminate the uncertainty of buyer financing.
• Pre-Foreclosure: If you're behind on payments and need to sell before foreclosure damages your credit, cash buyers can close fast enough to matter.
• Relocation: When you've already moved for a new job and can't afford to carry two mortgages while waiting months for a traditional buyer, cash offers provide immediate relief.
• Financial Stress: When you're part of the majority who can't afford to dedicate 51% of income to housing costs anymore, a fast cash sale can be a financial lifeline.

Quick Facts: San Diego Housing Affordability Crisis 2025

The Traditional Sale Challenge in This Market

Let's be honest about what a traditional sale involves in today's San Diego market. For a detailed comparison, see our guide on cash vs traditional sales.

Houses on the open market take an average of 82 days to sell from listing to closing—nearly three months of carrying costs, uncertainty, and stress. While waiting for a traditional sale to close, you're still responsible for monthly mortgage payments, property taxes, homeowners insurance, utilities and maintenance, and HOA fees if applicable.

For a median-priced San Diego home, that's easily $5,000-$7,000+ per month in carrying costs. Over a 90-day sale period, you're looking at $15,000-$21,000+ out of pocket.

Fast Cash Sale as an Alternative

Cash buyers operate fundamentally differently than traditional buyers, and in today's challenging market, those differences can be significant advantages.

How Cash Sales Work

The process is dramatically simplified:

1. Request an offer: Contact a reputable cash buyer with basic property details
2. Receive offer: Get a cash offer within 24-48 hours (no waiting for financing approval)
3. Accept and schedule closing: Choose your closing date (typically 7-14 days)
4. Minimal prep: Sell as-is with no repairs, staging, or cleaning required
5. Close: Sign papers and receive payment—done

The entire process from initial contact to cash in hand typically takes 7-14 days. Some cash buyers can close even faster if needed.

The Certainty Advantage

Cash offers eliminate the contingencies that plague traditional sales:

• No financing contingency: Cash buyers don't need lender approval, so there's no risk of the deal falling through due to denied financing
• No appraisal requirement: Cash buyers aren't borrowing money, so no lender-required appraisal that could come in low
• Minimal inspection issues: While cash buyers will inspect the property, they typically buy as-is without demanding repairs
• Faster closing: No 30-45 day underwriting period; close as soon as title work is complete

This certainty is particularly valuable when you're facing time pressure or financial stress. You know exactly when you'll have the funds and can plan accordingly.

The Price Trade-Off

Cash buyers typically offer 70-90% of market value, depending on property condition, location, and how quickly you need to close. This discount accounts for the speed and certainty they provide, risk they assume buying without financing, repairs and holding costs they'll incur, and marketing expenses if they resell.

While you'll net less than a top-dollar traditional sale, you save:

• 6% real estate commissions (that's $59,106 on a $985,092 median home)
• 2-3 months of carrying costs ($15,000-$21,000+)
• Repair and staging costs (often $10,000-$30,000+)
• Closing cost contributions to buyer (typically 2-3%)
• Risk of deal falling through and relisting at lower price

When you factor in time value of money, avoided costs, and eliminated risks, cash sales often net more than sellers expect—especially in a challenging market.

Frequently Asked Questions