San Diego Home Prices Fall for 4th Month: What It Means
TL;DR
San Diego home prices declined 0.85% year-over-year in September 2025, marking the fourth consecutive month of falling prices. With a median price of $975,000 and only 29% of homes selling above asking (down from 71% in April 2022), affordability challenges are reshaping the market. Sales volume is on track for the slowest year on record at 20,504 transactions through September. For homeowners facing foreclosure, inheritance, divorce, or relocation, understanding your options—including fast cash sales—has never been more critical.
Introduction: A Market in Transition
The San Diego housing market is experiencing a significant shift. After years of explosive growth that pushed prices to historic highs, the market is now contracting for four straight months. According to the San Diego Union-Tribune, San Diego's median home price in September stood at $975,000—down 0.85% from a year ago.
Lisa Sturtevant, chief economist at Bright MLS, puts it bluntly: "Affordability is the biggest constraint in the market right now." With only 15% of San Diego residents able to afford a median-priced home according to California Association of Realtors data, the market dynamics are fundamentally changing.
But what does this mean if you're a homeowner considering selling? Whether you're dealing with financial pressure, an inherited property, or simply need to relocate quickly, understanding today's market conditions can help you make smarter decisions.
The Numbers Tell the Story: Four Months of Decline
Price Trends Across San Diego County
The data reveals a clear cooling pattern:
- Median home price: $975,000 (September 2025)
- Annual price change: -0.85%
- National comparison: U.S. home prices up 1.3% (slowest in 2+ years)
- San Diego rank: 15th out of 19 major metro areas tracked
This marks a dramatic reversal from the pandemic-era frenzy when San Diego home prices soared to 10 times the median household income in spring 2022.
Sales Volume Hits Historic Lows
Perhaps more concerning than falling prices is the sharp decline in transactions:
| Metric | 2025 (Through Sept) | 2024 | 2023 |
|---|---|---|---|
| Total Sales | 20,504 | 25,920 | 25,317 |
| Trend | On track for slowest year | Previous low | Historic low |
At this pace, 2025 will record fewer home sales than any year in recent history—a clear signal that buyers are sitting on the sidelines.
Buyer Behavior Shifts Dramatically
The market psychology has completely flipped:
- Homes selling above asking: 29% (December 2025)
- Peak bidding wars: 71% sold above asking (April 2022)
- Days on market: 41 days (vs. 28 days in 2024)
- Mortgage rates: 6.30% for 30-year fixed (late September)
These numbers reflect a market where buyers have regained negotiating power and sellers can no longer expect multiple offers above list price.
Why Is This Happening? The Affordability Crisis
Income Can't Keep Pace with Prices
San Diego County's affordability crisis isn't new, but it's reached critical levels. The median home price of $985,092 now stands at 8.7 times the median household income of $112,933.
To put that in perspective:
- Fall 1997: Homes were 4.3 times income
- U.S. median: 5 times income
- San Diego 2025: 8.7 times income
As Andy Walden from Intercontinental Exchange explains, returning to 1990s affordability would require "around a 40% drop in home prices and a 70% rise in incomes"—neither of which seems likely in the near term.
Monthly Payments Consume Half of Income
The average San Diego County household must dedicate 51% of monthly income to mortgage principal and interest alone. This ranks San Diego as the third-worst metro area in the nation for housing affordability, behind only Los Angeles/Orange County (62%) and San Jose (53%).
The K-Shaped Recovery
Economist Lisa Sturtevant notes the market is experiencing "K-shaped dynamics," where luxury properties in areas like La Jolla (median $2.4-2.8 million) continue performing well, while mainstream housing in neighborhoods like Pacific Beach and North Park struggles. This wider wealth gap means younger and middle-income buyers face significant homeownership delays.
What Does This Mean for San Diego Homeowners?
If You're Planning to Sell
Today's market requires realistic expectations:
- Pricing is critical: With only 29% of homes selling above asking, overpricing will leave your property sitting on the market
- Timeline matters: Homes average 41 days on market—plan for at least 60-90 days from listing to closing with traditional sales
- Buyer financing risk: With rates around 6.30%, more deals fall through due to financing issues
- Competition from inventory: More homes are staying on market longer, giving buyers choices
If You're Facing Financial Pressure
The declining market creates urgency for homeowners in tough situations:
- Foreclosure threat: If you're behind on payments, selling before foreclosure can save your credit score from a 7-year hit
- Carrying two mortgages: Already relocated for work? Every month of double payments adds financial stress
- Inherited property: Paying property taxes, insurance, and maintenance on a home you don't live in drains savings quickly
- Divorce proceedings: Joint ownership complications while going through separation add emotional and financial strain
Neighborhood-Specific Considerations
Market conditions vary significantly across San Diego County:
- La Jolla: Still seeing 6.3% annual price growth with median prices around $2.4 million
- Pacific Beach: Median $1.3 million, up 4.5%, but cooling from earlier highs
- North Park: Attracting millennials but experiencing slower sales velocity
- Mission Beach/Ocean Beach: Coastal premium remains but affordability concerns limit buyer pool
Your Selling Options in Today's Market
Traditional Sale with a Real Estate Agent
Timeline: 82 days average (listing to closing)
Best for: Homeowners with time, homes in good condition, competitive markets like La Jolla
Pros:
- Potentially highest sale price
- Professional marketing and staging
- Access to MLS and wide buyer pool
Cons:
- 5-6% agent commissions
- Repairs and staging costs
- Financing contingencies (risk of deals falling through)
- Ongoing mortgage, insurance, and tax payments during sale process
- No guarantee of sale in slower market
Cash Sale to a Direct Buyer
Timeline: 7-14 days (offer to closing)
Best for: Foreclosure, inherited property, divorce, relocation, homes needing repairs
Pros:
- Close in as little as 7 days
- No repairs or cleaning required
- No agent commissions
- No financing contingencies—guaranteed closing
- Sell as-is (foundation issues, outdated systems, any condition)
- Avoid foreclosure damage to credit
Cons:
- Typically 10-30% below market value
- Less time for emotional preparation
According to industry data, cash buyers can close in just 7-14 days compared to the 82-day average for traditional sales—a critical difference when facing foreclosure deadlines or double mortgage payments.
When Does a Cash Sale Make Sense?
Scenario 1: Foreclosure Looming
If you're 3-4 months behind on payments, foreclosure proceedings move quickly. A traditional sale taking 60-90 days may not close before the courthouse auction. Cash buyers like San Diego Fast Cash Home Buyer who can close in 7-14 days, preserving your credit and avoiding the 7-year foreclosure mark.
Scenario 2: Inherited Property You Can't Afford
You've inherited your parents' home in North Park, but you live in another state. Between property taxes, insurance, utilities, and maintenance, you're spending $3,000+ monthly on a house you'll never live in. Probate is complex, and traditional buyers are scared off by the process. San Diego Fast Cash Home Buyer and other reputable cash buyers handle inherited properties regularly, even during probate with multiple heirs involved.
Scenario 3: Divorce Settlement
Neither spouse can afford to buy out the other's equity, and you need a clean break. Every month of joint ownership means continued financial entanglement. A cash sale can close in 2 weeks, allowing both parties to move forward independently without the uncertainty of buyer financing.
Scenario 4: Job Relocation
You've already moved to a new city for work and are carrying two mortgages. At $4,500/month for your old San Diego mortgage plus $3,200 for your new place, you're hemorrhaging $7,700 monthly. Waiting 3-6 months for a traditional buyer isn't sustainable. A cash sale stops the financial bleeding immediately.
Scenario 5: Property Condition Issues
Your Pacific Beach home needs $80,000 in foundation repairs, a new roof, and electrical updates. You don't have the cash to fix it, and traditional buyers will either walk away or demand repairs. Companies like San Diego Fast Cash Home Buyer purchase properties as-is, regardless of condition.
How to Evaluate a Cash Offer
Do the Math
Compare net proceeds, not just the offer price:
Traditional Sale Example (Pacific Beach home listed at $1,300,000):
- Sale price: $1,250,000 (after negotiation)
- Agent commission (5%): -$62,500
- Repairs/staging: -$15,000
- Mortgage payments during sale (3 months): -$13,500
- Closing costs: -$8,000
- Net proceeds: $1,151,000
Cash Offer Example:
- Offer price: $1,170,000 (10% below market)
- Repairs: $0
- Commissions: $0
- Additional mortgage payments: $0
- Closing costs: -$5,000
- Net proceeds: $1,165,000
In this scenario, the cash offer nets $14,000 more despite being 6.4% below the eventual traditional sale price—plus it closes in 10 days instead of 90.
Questions to Ask Cash Buyers
- How long have you been buying homes in San Diego?
- Can you provide references from recent sellers?
- What's your exact timeline from offer to closing?
- Are there any fees or hidden costs?
- Do you have proof of funds ready to close?
- Can you close on my timeline (if I need extra time)?
- Will you handle any liens or back taxes?
Understanding the Broader Market Context
Interest Rates Remain Elevated
With 30-year mortgage rates around 6.30%, borrowing costs are significantly higher than the 3% rates available in 2021-2022. This reduces buyer purchasing power by approximately 30%, meaning fewer qualified buyers can afford San Diego's high prices.
Sales Volume Continues Declining
According to market analysis, San Diego home sales volume in 2025 remains stuck at 2/3rds of 2019 levels. Detached home sales fell 5.2% year-over-year, while attached home sales dropped 18.3%.
Buyer Sentiment is Cautious
Recent market reports show 49% of homes in San Diego sold below their original list price as of March 2025—a clear shift toward a more balanced market where buyers have negotiating leverage.
Spring 2025 Outlook
While seasonal patterns suggest April-June typically brings 2.7% higher prices and 5-day faster sales, the underlying affordability crisis will continue constraining buyer demand throughout 2025.
Taking Action: Next Steps for Homeowners
Assess Your Situation
Honestly evaluate your timeline (weeks vs. months), financial pressure level (can you wait 90 days?), property condition (move-in ready vs. needs work), emotional readiness (divorce, estate, foreclosure), and local neighborhood trends (your area improving or declining?).
Get Multiple Perspectives
Consult with a local real estate agent for traditional sale estimate, 2-3 reputable cash buyers for comparison offers, a financial advisor about tax implications, and an attorney if dealing with inheritance or divorce.
Run the Numbers
Calculate net proceeds for each option. Factor in all costs (commissions, repairs, carrying costs), consider time value of money (3 months of mortgage payments adds up), and evaluate opportunity cost (what else could you do with immediate cash?).
Make an Informed Decision
There's no single right answer. Your best option depends on how urgently you need to sell, your property's condition and location, your financial situation and risk tolerance, and current market conditions in your specific neighborhood.
Quick Facts: San Diego Housing Market December 2025
| Metric | Current Data | Comparison |
|---|---|---|
| Median Home Price | $975,000 | Down 0.85% annually |
| Sales Volume (YTD) | 20,504 | Slowest year on record |
| Homes Selling Above Asking | 29% | Down from 71% (April 2022) |
| Days on Market | 41 days | Up from 28 days (2024) |
| Affordability Rate | 15% of residents | Only 1 in 6.7 can afford median home |
| Price-to-Income Ratio | 8.7x | Historically high (normal is 4-5x) |
| Monthly Income to Housing | 51% | Third-worst in nation |
| Mortgage Rate | 6.30% | Down from peak but still elevated |
| La Jolla Median | $2.4-2.8M | Premium neighborhoods holding value |
| Pacific Beach Median | $1.3M | Up 4.5% but cooling |
Sources: San Diego Union-Tribune, Bright MLS, Realtor.com, Redfin, Intercontinental Exchange
Frequently Asked Questions
How much are San Diego home prices falling?
San Diego home prices declined 0.85% year-over-year in September 2025, with the median price at $975,000. This marks the fourth consecutive month of declining prices. However, luxury areas like La Jolla continue seeing modest growth (6.3% annually), while mainstream neighborhoods experience more significant cooling.
Why are San Diego home sales at record lows?
Sales volume through September 2025 totaled just 20,504 transactions—on track for the slowest year in recorded history. The primary constraint is affordability: only 15% of San Diego residents can afford a median-priced home, with prices now 8.7 times the median household income. High mortgage rates around 6.30% further reduce buyer purchasing power.
Should I wait to sell my San Diego home until prices recover?
It depends on your situation. If you're facing foreclosure, carrying two mortgages, dealing with an inherited property, or going through a divorce, waiting months or years for potential price appreciation may not be feasible. Additionally, continued carrying costs (mortgage, taxes, insurance, maintenance) can exceed any potential price gains. Consider your specific financial pressure and timeline.
How long does it take to sell a house in San Diego right now?
Traditional sales average 82 days from listing to closing in San Diego, with homes spending about 41 days on the market before accepting an offer. Spring listings (April-June) typically sell 5 days faster. However, cash buyers can close in 7-14 days, which is critical for homeowners facing foreclosure deadlines or financial pressure from double mortgage payments.
What percentage of San Diego homes are selling above asking price?
Only 29% of San Diego homes are currently selling above asking price, down dramatically from 71% in April 2022. This shift reflects the market's transition from a frenzied seller's market to a more balanced environment where buyers have regained negotiating power. About 49% of homes now sell below their original list price.
Is it better to sell to a cash buyer or use a real estate agent?
Both options have merits depending on your circumstances. Traditional sales with an agent typically yield higher gross prices but involve 5-6% commissions, repair costs, longer timelines (82 days average), and financing risk. Cash sales close in 7-14 days with no repairs, no commissions, and guaranteed closing, but typically offer 10-30% below market value. Calculate net proceeds for each option and consider your timeline urgency.
How do foreclosure threats affect my selling timeline?
Foreclosure proceedings move quickly once initiated. If you're 3-4 months behind on payments, a traditional sale taking 60-90 days may not close before the courthouse auction. Cash buyers who can close in 7-14 days may be your only option to avoid the foreclosure hitting your credit report, which remains for 7 years and significantly impacts your ability to buy another home or even rent an apartment.
What should I look for in a reputable San Diego cash home buyer?
Look for buyers with: (1) Several years of local experience buying homes in San Diego County; (2) Verifiable references from recent sellers; (3) Transparent explanation of their offer calculation; (4) No hidden fees or costs; (5) Proof of funds ready to close; (6) Willingness to work on your timeline; (7) Experience handling complex situations like probate, liens, or foreclosure. Avoid buyers who pressure you to sign immediately without time to review offers.
Conclusion: Make the Right Choice for Your Situation
San Diego's housing market is undergoing a fundamental shift. After four consecutive months of price declines, record-low sales volume, and only 29% of homes selling above asking price, the seller's market that defined 2021-2022 is clearly over. With affordability as the "biggest constraint" and only 15% of residents able to afford a median-priced home, market dynamics will likely remain challenging throughout 2025.
For homeowners facing foreclosure, dealing with inherited property, navigating divorce, or relocating for work, understanding your options is critical. While traditional sales may yield higher gross prices in stable situations, the reality of 5-6% commissions, repair costs, 82-day timelines, and financing contingencies makes cash offers increasingly attractive for those who need certainty and speed.
The key is running the numbers for your specific situation. Calculate net proceeds, factor in carrying costs, and honestly assess your timeline and stress tolerance. There's no shame in choosing a fast cash sale if it solves your immediate problem—even if it means accepting less than peak market value.
Whether you're in Pacific Beach, La Jolla, North Park, or any San Diego neighborhood, the right selling strategy depends on your unique circumstances. Take time to explore all options, consult with professionals, and make an informed decision that serves your financial and personal goals.
Need to sell your San Diego home quickly?
San Diego Fast Cash Home Buyer purchases homes throughout San Diego County in as-is condition. We close in 7-14 days with no repairs, no commissions, and no financing contingencies. Contact us today for a no-obligation cash offer and discover how much you could net after all costs are considered.
Citations
- San Diego Union-Tribune - Affordability is the biggest constraint: San Diego home prices fall for 4th month - Accessed December 9, 2025
- San Diego Union-Tribune - Here is how much San Diego home prices are outpacing wages - Accessed December 9, 2025
- SD Cash Buyer - Only 15% Can Afford a San Diego Home - Accessed December 9, 2025
- Norada Real Estate - San Diego Housing Market: Trends and Forecast 2025-2026 - Accessed December 9, 2025
- Redfin - San Diego Housing Market: House Prices & Trends - Accessed December 9, 2025
- Redfin - La Jolla, San Diego Housing Market - Accessed December 9, 2025
- Luxury SoCal Realty - San Diego Home Prices by Neighborhood: Complete 2025 Market Analysis - Accessed December 9, 2025
- Luxury SoCal Realty - When is the Best Time to Sell Your House in San Diego - Accessed December 9, 2025
- iBuyer - 7 Companies That Buy Houses For Cash in San Diego in 2025 - Accessed December 9, 2025
- List with Clever - How to Sell My House Fast in San Diego, CA (2025 Update) - Accessed December 9, 2025
- California Association of Realtors - Housing Affordability Index - Accessed December 9, 2025