San Diego Home Prices Fall 4 Months: Time to Sell Fast?
TL;DR
- San Diego home prices fell 0.85% annually in September 2025—the fourth consecutive monthly decline
- Only 29% of homes now sell above asking price, down from 71% in April 2022
- The market is on track for one of the slowest sales years on record with just 20,504 sales through September
- Affordability crisis deepens: only 11-15% of San Diego households can afford the median-priced home
- Cash buyers offer 7-14 day closings for sellers needing certainty in an uncertain market
After years of relentless price increases, San Diego's housing market has entered unfamiliar territory. Home prices in the San Diego metropolitan area decreased 0.85% annually in September 2025, marking the fourth straight month of decline according to the S&P CoreLogic Case-Shiller Indices. This trend represents a significant shift for a market that has long been one of California's most competitive.
The median price for a single-family home now stands at $975,000, down from a peak of $1,040,000 in May 2025. While prices remain elevated by historical standards, the consecutive monthly declines signal a fundamental change in market dynamics. As Lisa Sturtevant, chief economist at Bright MLS, notes: "Affordability is the biggest constraint in the market right now."
For San Diego homeowners, particularly those facing life transitions like inheritance, divorce, relocation, or financial challenges, understanding these market shifts is critical to making informed selling decisions.
Why San Diego Home Prices Are Falling
The Affordability Crisis Reaches Breaking Point
San Diego's housing affordability has deteriorated to crisis levels. The Housing Affordability Index stood at just 11% in the second quarter of 2025, meaning only one in nine San Diego households possesses the financial capacity to afford the median-priced home. Other analyses suggest only 15% of San Diegans can afford a median-priced home—a figure that represents a social and economic emergency.
To put this in perspective, the required annual income to afford San Diego's median-priced home is approximately $263,200—nearly double the maximum income allowed for first-time homebuyer assistance programs ($132,400). This effective exclusion of middle-income earners and first-time buyers from the market has created a demand vacuum that even falling prices haven't filled.
Record-Low Sales Volume
The market's struggles are evident in transaction data. San Diego County recorded just 20,504 home sales through September 2025, putting the year on track to be one of the slowest on record. To contextualize this figure, the previous slowest year was 2023 with 25,317 sales—meaning 2025 is trending nearly 20% below that already-depressed level.
September 2025 saw only 2,385 home sales, making it the fourth slowest September in records dating back to 1988. This dramatic slowdown reflects buyers' inability or unwillingness to enter the market at current price and interest rate levels.
The Shift in Bargaining Power
Perhaps no statistic better illustrates the market's transformation than this: only 29% of San Diego homes sold above asking price in September 2025, compared to 71% in April 2022. During the pandemic-era frenzy, multiple offers and bidding wars were the norm. Today, sellers increasingly face price reductions and extended days on market.
The percentage of listings that underwent price reductions jumped to 27.8% in 2025, up from 21.6% in 2024 and the highest share since 2019. Homes that once sold in 15-30 days during peak seller's market periods now average 27-45 days on market, with some properties sitting for 60-75 days.
What This Means for Different San Diego Neighborhoods
La Jolla: Luxury Market Resilience
La Jolla continues to command some of San Diego's highest property values, with homes often selling above asking price despite broader market weakness. The neighborhood's stunning coastal views, proximity to UC San Diego, and limited inventory create a micro-market that's partially insulated from county-wide trends. However, even luxury sellers should recognize that the pool of qualified buyers has shrunk.
Pacific Beach: The Rental-Sale Balance
Pacific Beach's unique mix of rental properties and owner-occupied homes creates interesting dynamics. While the neighborhood maintains strong appeal among young professionals and beach lifestyle enthusiasts, the combination of high prices and elevated interest rates has cooled the once-frenzied competition. Properties still move relatively quickly compared to suburban areas, but the automatic bidding wars have largely disappeared.
North Park: Middle Market Pressure
North Park represents San Diego's middle market, with average home prices ranging from $550,000 to $1 million. This segment faces the most acute affordability challenges, as it targets first-time buyers and middle-income families—precisely the groups most squeezed out by current conditions. Sellers in North Park and similar neighborhoods (City Heights, Normal Heights, Kensington) may face longer marketing periods and greater need for competitive pricing.
The K-Shaped Housing Market: Two Different Realities
San Diego is experiencing what economists call a "K-shaped" real estate market, where different segments move in opposite directions. Luxury properties ($2 million+) continue to attract qualified buyers and sell within 45 days on average, while mainstream homes struggle to find buyers despite price reductions.
This bifurcation reflects broader wealth inequality trends. High-income households with substantial equity and strong cash positions can navigate elevated prices and interest rates. Middle-income families cannot. Nicholas Godec of S&P Dow Jones Indices observes that the market appears to be "settling into a new equilibrium of minimal price growth, or outright decline" due to elevated mortgage rates and multi-decade affordability lows.
When Selling Fast to a Cash Buyer Makes Sense
In this uncertain market environment, many San Diego homeowners are discovering that traditional listings aren't their only—or best—option. Cash home sales have surged as sellers prioritize certainty and speed over maximum price.
You're Dealing with Inherited Property
Inherited properties present unique challenges in San Diego's current market. Probate in San Diego County typically takes 6-24 months, with simple estates completing in 6-9 months and complex situations requiring 18-24 months. Even after the executor is appointed, court approval is required for the sale, adding administrative complexity and legal fees.
For heirs who don't want to maintain, repair, or manage an inherited home during this extended period, cash buyers offer an alternative. Most cash buyers purchase properties as-is, eliminating the need for costly renovations or repairs to compete in the traditional market.
You're Going Through a Divorce
Divorce proceedings often require liquidating shared assets quickly and equitably. The traditional real estate process—with its 60-90 day timeline from listing to closing, staging requirements, open houses, and financing contingencies—can prolong an already stressful situation.
Cash buyers eliminate these friction points. There are no appraisal contingencies that might fall through, no buyer financing that could be denied at the last minute, and no extended negotiations over repair requests.
You're Facing Financial Distress or Pre-Foreclosure
For homeowners behind on mortgage payments, time is the enemy. Traditional listings take 60-90 days on average in San Diego's current market, and there's no guarantee of a sale at your desired price. Each month of unsuccessful marketing means additional late fees, credit damage, and foreclosure risk.
Cash buyers can close in as little as 7 days, potentially allowing homeowners to satisfy mortgage obligations before foreclosure proceedings advance. While cash offers typically range from 70-85% of market value, this discount may be preferable to foreclosure, which devastates credit scores and can result in deficiency judgments.
You're Relocating for Work
Job relocations create compressed timelines that don't always align with real estate market realities. If you've already moved to your new location, maintaining an empty house in San Diego while covering mortgage payments, property taxes, insurance, and utilities creates significant financial strain.
With homes now averaging 27-45 days on market—and some properties sitting much longer—a traditional sale could mean three to six months of dual housing costs. For many relocating families, the certainty of a cash offer and rapid closing outweighs the potential for a higher sale price through traditional channels.
Your Property Needs Significant Repairs
In today's slower market, buyers have options and bargaining power they lacked during the pandemic era. Properties requiring major repairs—foundation issues, roof replacement, outdated electrical or plumbing systems, mold remediation—face steep discounts and extended marketing periods.
Completing repairs before listing requires upfront capital, contractor coordination, and time. In a falling market, there's also risk that prices will decline while you're completing improvements, eroding any value gained from the repairs. Cash buyers who purchase as-is eliminate these concerns, providing a known outcome without the capital outlay and execution risk.
Understanding Cash Offer Economics
Cash buyers typically offer 70-85% of a property's fair market value. While this represents a discount from traditional sale proceeds, the all-in comparison is more nuanced:
Traditional Sale Costs
- • Realtor commissions: 5-6% of sale price
- • Seller-paid closing costs: 1-3% of sale price
- • Repairs and staging: $5,000-$25,000+
- • Carrying costs during 60-90 day marketing period
- • Risk of financing fall-through requiring re-listing
Cash Sale Costs
- ✓ Typically no realtor commissions
- ✓ Minimal to no closing costs
- ✓ No repairs or staging required
- ✓ No carrying costs beyond 7-14 days
- ✓ Certain close date
For San Diego homeowners, the calculation depends on individual circumstances. A property needing $50,000 in repairs, vacant for three months while listed, with $4,500 monthly carrying costs, might net similar proceeds through a cash sale compared to a traditional listing—with far less stress and uncertainty.
Market Forecast: What to Expect in 2026
The California Association of Realtors released its 2026 forecast in October 2025, providing insight into where the market is headed. Key projections include:
- Median home prices: Expected to rise 3.6% to $905,000 statewide (San Diego typically tracks higher)
- Sales volume: Projected to increase 2% to 274,400 units as market conditions stabilize
- Mortgage rates: Forecast to decline to 6.0% in 2026, down from 6.6% in 2025
- Affordability: Expected to improve modestly to 18%, up from 17% in 2025
C.A.R. President Heather Ozur noted that "more opportunities" will emerge as "inventory increases moderately and lending conditions become more favorable," creating improved conditions for homebuyers after a slower 2025 market.
For sellers, this forecast suggests a market in transition. The dramatic declines of late 2025 will likely moderate, but the explosive growth of 2020-2022 is not expected to return. In this environment, pricing competitively and understanding your alternatives becomes critical.
Quick Facts: San Diego Housing Market (2025)
| Metric | Current Value | Change from Peak |
|---|---|---|
| Median Single-Family Price | $975,000 | -$65,000 (-6.3%) |
| Annual Price Change | -0.85% | Declining |
| Homes Selling Above Ask | 29% | Down from 71% (Apr 2022) |
| Sales Volume (YTD Sept) | 20,504 | On track for record low |
| Affordability Index | 11-15% | Crisis levels |
| Average Days on Market | 27-45 days | Up from 15-30 (2022) |
| Price Reductions | 27.8% of listings | Highest since 2019 |
| Median Time to Sell | 25-27 days | Up from 20 days (2024) |
Frequently Asked Questions
Is now a bad time to sell a house in San Diego?
Not necessarily. While prices have declined for four consecutive months, San Diego home values remain historically high at a median of $975,000. The key is realistic pricing and understanding your alternatives. If you need to sell due to inheritance, divorce, relocation, or financial reasons, waiting for a market recovery that may not come could be costlier than selling now. Cash buyers provide certainty in an uncertain market.
How long does it take to sell a house in San Diego right now?
The median time on market is currently 25-27 days, up from 20 days in October 2024. However, this varies significantly by neighborhood, price point, and property condition. Luxury homes in La Jolla may sell in 15-20 days, while properties needing repairs in middle-market neighborhoods can sit for 60-90 days or longer. Cash sales typically close in 7-14 days regardless of property condition.
What percentage of San Diegans can actually afford to buy a home?
Only 11-15% of San Diego households can currently afford the median-priced home, representing one of the worst affordability crises in the region's history. The required annual income to afford a median-priced home is approximately $263,200, nearly double the income ceiling for first-time homebuyer assistance programs. This severe affordability constraint is driving the current sales slowdown.
Should I make repairs before selling in this market?
It depends on your timeline and financial situation. In the current buyer's market, properties in excellent condition command premium prices and sell faster. However, major repairs require upfront capital, time, and contractor coordination—with no guarantee of recovering your investment in a declining market. For sellers needing to move quickly or lacking capital for improvements, as-is cash sales eliminate this dilemma.
How much do cash buyers typically offer compared to market value?
Cash buyers generally offer 70-85% of fair market value. While this represents a discount, the all-in comparison includes savings on realtor commissions (5-6%), seller closing costs (1-3%), repairs and staging ($5,000-$25,000+), and carrying costs during extended marketing periods. For properties needing significant work or sellers with time constraints, the net proceeds may be comparable to a traditional sale with far less risk and hassle.
What happens if I inherit a property in San Diego but don't want to keep it?
Inherited properties can be sold, but probate in San Diego County typically takes 6-24 months. You'll need court appointment of an executor and court approval for the sale. During this period, you're responsible for property taxes, insurance, maintenance, and any mortgage payments. Many heirs choose to sell to cash buyers who can work within probate timelines and purchase properties as-is, eliminating the burden of maintaining and improving a property during the lengthy probate process.
Is the San Diego housing market going to crash?
Market analysts do not predict a crash similar to 2008. The current slowdown reflects affordability constraints and elevated interest rates, not the overleveraged lending and speculation that caused the Great Recession. The California Association of Realtors forecasts modest price growth of 3.6% statewide in 2026 as mortgage rates decline to 6.0% and market conditions stabilize. San Diego's fundamental supply constraints—limited land, desirable climate, strong job market—provide a price floor that should prevent dramatic declines.
What are the benefits of selling to a cash buyer during market uncertainty?
Cash buyers offer certainty when traditional sales become unpredictable. Benefits include: guaranteed closing without financing contingencies, as-is purchases eliminating repair obligations, 7-14 day timelines instead of 60-90 days, no realtor commissions or seller closing costs, and flexibility around moving dates. In a market where 27.8% of listings face price reductions and homes sit for 45-75 days, this certainty has quantifiable value.
Facing a Timeline That Doesn't Match the Market's Pace?
San Diego Fast Cash Home Buyer LLC specializes in helping homeowners navigate complex situations with fair cash offers and 7-14 day closings. Whether you're dealing with inheritance, divorce, relocation, financial challenges, or property condition issues, we provide straightforward solutions when the traditional market won't work.
Free consultation • No obligation • 7-14 day closings • As-is purchases
Citations
- San Diego Union-Tribune: "Affordability is the biggest constraint: San Diego home prices fall for 4th month" - Accessed December 7, 2025
- California Association of Realtors: 2026 California Housing Market Forecast - Accessed December 7, 2025
- Norada Real Estate: San Diego Housing Market Trends and Forecast 2025-2026 - Accessed December 7, 2025
- Luxury SoCal Realty: San Diego Housing Market Statistics (September 2025) - Accessed December 7, 2025
- Opelon: Selling A House In San Diego Probate - 2025 Guide - Accessed December 7, 2025
- HomeLight: How to Sell My House for Cash in San Diego - Accessed December 7, 2025
- One Percent Listings: San Diego Housing Market Forecast 2025 - Accessed December 7, 2025
- Luxury SoCal Realty: Best San Diego Neighborhoods 2025 - Accessed December 7, 2025