San Diego Home Prices Hit 8.7x Income: What It Means for You

Introduction: A Crisis Decades in the Making

San Diego has always commanded premium prices for its year-round sunshine, ocean access, and quality of life. But recent data reveals the affordability gap has reached historic proportions. According to analysis published by the San Diego Union-Tribune in November 2025, the county's median home price is now 8.7 times the median household income—approaching the all-time high of 10x set during the pandemic housing frenzy of spring 2022.

For perspective, the national average sits at just 5 times income. This means San Diego homebuyers face nearly double the affordability burden of the typical American city.

The consequences extend beyond aspiring first-time buyers. Current homeowners facing job loss, divorce, medical bills, or relocation increasingly find themselves trapped—unable to afford their mortgages yet hesitant to sell in a complex market. Understanding the data behind this crisis can help you make informed decisions about your property.

How Did San Diego Become Nearly Twice as Unaffordable as the Nation?

The Price-to-Income Gap Widens

In October 2025, San Diego County's median home price reached $985,092 while the median household income stood at $112,933. This creates the 8.7x ratio that places San Diego among the nation's least affordable metros, according to data from Intercontinental Exchange mortgage research.

Compare this to historical benchmarks:

The 1997 figures show that even 28 years ago, San Diego was slightly more expensive than average. But the current 8.7x ratio represents a near-doubling of the affordability burden since the late 1990s.

Where San Diego Ranks Nationally

Andy Walden, head of mortgage research at Intercontinental Exchange, compiled rankings of 100 major U.S. metros by the percentage of income required for mortgage payments. San Diego landed in 3rd place for unaffordability:

1. Los Angeles/Orange County: 62% of income required
2. San Jose: 53% of income required
3. San Diego: 51% of income required

For comparison, the most affordable metros—Des Moines and Dayton—require just 19% of household income for mortgage payments. Financial advisors traditionally recommend spending no more than 28-30% of gross income on housing.

The 51% Mortgage Burden

When the average household must dedicate 51% of monthly earnings to mortgage principal and interest alone, something has to give. This figure doesn't even include property taxes (typically 1.1-1.3% in San Diego County), homeowners insurance (averaging $1,500-2,500 annually), HOA fees, maintenance, or utilities.

Many San Diego homeowners are essentially house-poor—financially stretched to the breaking point despite owning valuable real estate. For starter homes specifically, the burden is even worse: mortgage payments consume 66.2% of a median renter's income, creating a near-impossible barrier to homeownership for first-time buyers.

Why Doesn't San Diego's Economy Support Its Housing Costs?

San Diego economist Ray Major identifies the structural problem: "The biggest problem I've always seen is we don't have the type of jobs here that allow people, even for households with two incomes, to buy a median priced home."

Unlike other expensive metros, San Diego lacks major corporate headquarters that could drive wages upward. San Jose, for example, compensates for high housing costs through Silicon Valley employment opportunities with six-figure salaries. San Francisco hosts major tech companies and financial institutions. Seattle has Amazon and Microsoft.

San Diego's economy relies heavily on:

• Military installations (with fixed government salaries)
• Tourism and hospitality (lower-wage service jobs)
• Healthcare and life sciences (varied pay scales)
• Small to medium-sized tech companies

Genine Wilson, Vice President at CHG Healthcare, describes the phenomenon as "the beach tax, it's the beach and mountain all in the same day tax"—workers accept reduced compensation in exchange for lifestyle benefits. This creates a permanent structural mismatch between incomes and housing costs.

Neighborhood-Level Impact: From Pacific Beach to La Jolla

The affordability crisis affects different San Diego neighborhoods in varying degrees:

Coastal Premium Communities

La Jolla: With median home prices around $2.5 million (some estimates range to $2.8-3.2 million for certain areas), La Jolla requires household incomes exceeding $500,000 to meet traditional affordability guidelines. Oceanfront properties command $5-20+ million while inland homes start at $1.8 million.

Pacific Beach: The median home price of approximately $1.3 million requires household income of roughly $260,000 to qualify for traditional financing with 20% down. Many properties receive multiple offers and sell above asking price.

Mission Beach & Ocean Beach: Beachfront access drives prices to $1.2-2.5 million for single-family homes, with smaller beach cottages starting around $900,000.

Urban Core Neighborhoods

North Park: Once considered an affordable alternative, North Park has experienced rapid gentrification with home prices now exceeding $800,000 for typical single-family homes. The neighborhood's walkability, breweries, and cultural attractions have attracted millennial buyers willing to stretch budgets.

Affordability Pressures Create Stress Sellers

Inland communities like Spring Valley, El Cajon, and Encanto show higher foreclosure rates (approximately 1 in 2,100 properties) compared to coastal areas (1 in 4,250 properties). Rising interest rates directly contributed to increased foreclosure activity in 2023-2024, with legal professionals reporting a 31% increase in foreclosure-related consultations.

Current market data shows approximately 1,000 Notices of Default recorded countywide in the past 12 months, along with a small but growing number of short sales—10 currently on the market compared to near-zero just two years ago.

What Would It Take to Fix San Diego's Affordability Crisis?

Andy Walden from Intercontinental Exchange calculated the math required to return San Diego to 1990s-era affordability levels. The answer is sobering: home prices would need to drop 40% while incomes simultaneously rise 70%.

Neither scenario appears remotely likely:

Why Prices Won't Drop 40%: San Diego's housing supply remains constrained by geographic limitations (ocean on the west, mountains to the east, Mexico to the south) and restrictive zoning. Current inventory sits around 6,000 homes—double the pandemic low of 3,200, but still well below healthy market levels of 10,000-12,000 listings.

Why Incomes Won't Rise 70%: Without major corporate relocations or a fundamental shift in San Diego's economic base, dramatic wage increases aren't on the horizon. The structural "sunshine tax" keeps salaries suppressed compared to metros with comparable housing costs.

Walden notes, "Given where things stand now, it would take some time and meaningful movement" to meaningfully improve affordability.

When Staying in Your Home Stops Making Financial Sense

For many San Diego homeowners, the affordability crisis creates impossible choices. You may find yourself in financial distress despite owning a valuable asset if:

Job Loss or Income Reduction

Losing a job in San Diego's tight labor market can quickly lead to mortgage default when 51% of your income was already committed to housing. The region's high cost of living leaves little room for emergency savings.

Divorce or Family Changes

Divorce often requires liquidating shared assets. When both spouses' incomes were needed to qualify for the mortgage, neither can afford to buy out the other or refinance independently. A quick sale may be the only viable path to dividing assets and moving forward.

Relocation for Work

Employers increasingly require in-person attendance as remote work policies contract. If you land a job opportunity outside San Diego, carrying two housing payments during a 3-6 month traditional sale process can drain savings.

Inherited Property

Inheriting a San Diego home may seem like a windfall until you face the reality: property taxes based on current market value (potentially 10-20x higher than the original owner paid under Proposition 13), maintenance costs, HOA fees, and utilities. If you already own a home elsewhere, the inherited property can become a financial burden.

Medical Expenses or Debt

Serious illness or injury can generate six-figure medical bills even with insurance. When you're already dedicating 51% of income to your mortgage, unexpected expenses create an immediate crisis.

Your Options When You Need to Sell Quickly

Traditional Sale: 3-6 Months Minimum

The traditional approach involves:

• Hiring a listing agent (5-6% commission)
• Preparing the home (repairs, painting, staging: $5,000-30,000)
• Multiple showings over weeks or months
• 30-45 day escrow period after accepting an offer
• Risk of buyer financing falling through

Total timeline: 90-180 days from listing to closing
Total costs: 8-10% of sale price after all expenses

Cash Buyer: 7-14 Days Start to Finish

Cash home buyers like San Diego Fast Cash Home Buyer offer:

• Speed: Close in as little as 7-14 days
• As-is purchases: No repairs, no painting, no staging required
• No commissions: Save 5-6% immediately
• Certainty: No financing contingencies or deal falling through
• Privacy: No endless showings or disruption

This option works particularly well for:

• Homeowners facing foreclosure who need to sell before auction
• Divorcing couples who want a clean break
• Families dealing with inherited property
• Anyone relocating on a tight timeline
• Property owners with deferred maintenance who can't afford repairs

Financial Relief Through Fast Sale

Even if you owe more than the home's value (an underwater mortgage), California law prohibits deficiency judgments on primary residence purchase-money loans. Selling to a cash buyer can help you:

• Avoid foreclosure and credit damage
• Eliminate the stress of unaffordable payments
• Access equity to start fresh elsewhere
• Resolve estate or divorce complications quickly

Frequently Asked Questions

Conclusion: Understanding Your Options in an Unaffordable Market

San Diego's housing affordability crisis—with prices 8.7 times median income and homeowners dedicating 51% of earnings to mortgages—creates real financial stress for thousands of families. While economists debate long-term solutions, individual homeowners facing job loss, divorce, health issues, or relocation need immediate answers.

If you're considering selling because the numbers no longer work, you have options. Traditional sales through real estate agents work well when you have time, money for repairs, and a home in good condition. Cash buyers offer an alternative when speed matters, repairs are needed, or circumstances require certainty.

The math is clear: San Diego's housing market won't achieve true affordability without dramatic changes in either prices or incomes—both unlikely in the near term. For homeowners struggling with unsustainable mortgage payments or life changes that demand quick action, understanding all your selling options empowers better decisions.

Need to sell your San Diego home quickly? San Diego Fast Cash Home Buyer purchases properties throughout San Diego County in as-is condition with cash closings in 7-14 days. We serve Pacific Beach, La Jolla, Mission Beach, Ocean Beach, North Park, and 20+ other neighborhoods. Contact us today for a no-obligation cash offer on your property—no repairs, no commissions, no stress.