Only 15% Can Afford a San Diego Home: What It Means for You
TL;DR
- • Only 13-15% of San Diego households can afford the $1 million median-priced home
- • Home prices are 8.7 times median income—nearly double the national average
- • The affordability crisis creates unique challenges and opportunities for current homeowners
- • Cash sales offer fast, certain alternatives for homeowners who need to sell quickly
- • Pre-foreclosure, inherited properties, and life transitions create motivated seller situations
- • Professional cash buyers can close in 7-14 days with no repairs required
San Diego's housing market has reached a breaking point. Recent data reveals that only 13-15% of San Diego County households can afford to purchase the median-priced home in the region—a stark reality that's reshaping the American Dream for hundreds of thousands of residents.
While most coverage focuses on aspiring first-time buyers locked out of the market, this affordability crisis has profound implications for current homeowners too. Whether you're facing financial pressure, managing an inherited property, or simply need to relocate, understanding these market dynamics can help you make informed decisions about your most valuable asset.
The Stark Reality: San Diego's Affordability Crisis by the Numbers
The statistics paint a sobering picture of San Diego's housing market in 2025:
Affordability Rate
Only 13% of San Diego County households could afford to purchase the $1 million median-priced home in the third quarter of 2025, according to the California Association of Realtors (CAR). Some studies place this figure as high as 15%, but either way, 85-87% of the population is effectively priced out of homeownership.
Price-to-Income Ratio
San Diego County's median home price of $985,092 is now 8.7 times the median household income of $112,933. To put this in perspective, the national median is just 5 times income—a gap that hasn't existed in San Diego for 25 years.
Income Requirements
It takes an annual household income of $242,560 to afford the mortgage on a median-priced home in San Diego, assuming homebuyers spend no more than 30% of their income on monthly mortgage payments. This is more than double the county's median household income of around $108,000-$113,000.
Historical Context
This affordability crisis approaches the peak of spring 2022, when home prices hit 10 times median income during the post-COVID housing rush. Even during the 2004 housing boom, the ratio only reached 9.7 times income. We have to go back to fall 1997—nearly three decades—to find a healthy 4.3 times income ratio.
What Changed? How We Got Here
San Diego's affordability crisis isn't the result of a single factor but rather a perfect storm of economic forces:
Home Prices Outpacing Wages
While home prices have surged, wages haven't kept pace. Ray Major, a San Diego economist, identifies "lackluster wages in the region" as a core structural problem. Unlike tech hubs such as San Francisco or Seattle, San Diego lacks major corporate headquarters that drive high-salary job growth. Many workers accept the "sunshine tax"—lower pay in exchange for the region's climate and lifestyle amenities.
Limited Housing Inventory
San Diego's housing shortage continues to constrain the market. As of late 2025, only about 6,000 homes were listed for sale—nearly double the 3,200 available during May 2022's inventory crisis, but still far below what's needed for a balanced market. Many homeowners with sub-3% mortgage rates from 2020-2021 are reluctant to list, even if they'd like to downsize or relocate.
Elevated Mortgage Rates
While mortgage rates have moderated from their 2023 peaks, 30-year fixed rates around 6-6.5% still make homeownership expensive. San Diego households must dedicate 51% of monthly income to mortgage principal and interest—the third-highest burden among 100 metro areas, behind only Los Angeles/Orange County (62%) and San Jose (53%).
The Remote Work Effect
Remote work has eliminated location-based wage adjustments, allowing workers from higher-cost metros like San Francisco or New York to relocate to San Diego while maintaining their existing salaries. This influx of equity-rich buyers with remote-work flexibility concentrates demand in desirable coastal and walkable districts, further driving up prices.
Disparities: The Affordability Crisis Doesn't Affect Everyone Equally
The affordability crisis hits different communities with unequal force. According to CAR data:
- Asian households: 20% can afford the median-priced home
- White households: 17% can afford the median-priced home
- Hispanic/Latino households: 9% can afford the median-priced home
- Black households: 7% can afford the median-priced home
These disparities reflect longstanding wealth gaps, income inequality, and systemic barriers to economic opportunity. The affordability crisis doesn't just lock people out of homeownership—it widens existing economic divides.
What This Means for Current Homeowners: You're Not Just Watching from the Sidelines
Most coverage of the affordability crisis focuses on frustrated renters and would-be buyers. But if you already own a home in San Diego, these market conditions affect you in significant ways:
The Equity Opportunity
San Diego home values remain near record highs. Even with modest price declines in late 2025 (home prices fell 0.85% year-over-year in September), most homeowners have built substantial equity. If you purchased before 2020, your home may have appreciated 40-60% or more.
This equity represents financial opportunity—if you can access it. Whether you're facing unexpected expenses, want to relocate closer to family, or need to settle an estate, your home equity is a powerful financial tool.
The Lock-In Effect
If you have a mortgage rate below 4%, you're probably experiencing "rate lock-in." Moving to a comparable home means taking on a mortgage at 6-6.5%, potentially doubling your monthly payment even if the home price is similar. This keeps many homeowners stuck in homes that no longer fit their needs.
Life Changes Don't Wait for Market Timing
Unfortunately, life events don't align with ideal market conditions:
- Divorce or separation: Selling the family home is often necessary to divide assets and move forward
- Job relocation: Career opportunities or military transfers may require you to move on short notice
- Health issues or aging: Downsizing, moving closer to medical care, or transitioning to assisted living becomes urgent
- Inherited property: Managing a parent's or relative's home from afar creates stress and expense
- Financial hardship: Job loss, medical bills, or rising living costs can make mortgage payments unsustainable
In these situations, the question isn't "Should I sell in this market?" but rather "What's the fastest, most certain way to sell?"
When Financial Pressure Mounts: Pre-Foreclosure Realities in San Diego
San Diego experienced a 23% increase in foreclosure filings in Q3 2023, with 1,847 total cases. While foreclosure numbers remain well below the 2008-2010 crisis, financial hardship affects more homeowners than statistics suggest.
The Pre-Foreclosure Timeline
Pre-foreclosure begins after a homeowner misses several months of payments, typically three to six months, prompting the lender to issue a Notice of Default. California law provides specific protections, including:
- 30-day contact period: The lender must attempt to contact you before filing foreclosure
- 90-day waiting period: After receiving a Notice of Default, you have 90 days before the bank can proceed with foreclosure
This timeline provides opportunity to act, but time is critical.
Selling Before Foreclosure: Preserving Your Financial Future
Foreclosure has severe, long-lasting consequences:
- Credit damage: Foreclosure can reduce your credit score by 200-300 points and remain on your credit report for seven years
- Future borrowing: Difficulty qualifying for mortgages, auto loans, and even rental housing
- Deficiency judgments: In some cases, you may still owe money after foreclosure if the sale doesn't cover your loan balance
- Tax consequences: Forgiven debt can be treated as taxable income
Selling your home before foreclosure—even under time pressure—allows you to:
- Walk away with remaining equity instead of losing it
- Avoid foreclosure on your credit report
- Control the process and timeline
- Preserve your ability to buy again in the future
Quick Facts: San Diego Housing Affordability Crisis
| Fact Category | Details |
|---|---|
| Affordability Rate | Only 13-15% of households can afford median-priced home |
| Median Home Price | $985,092 to $1,000,000 (Q3-Q4 2025) |
| Median Household Income | $112,933 |
| Price-to-Income Ratio | 8.7x (compared to 5x nationally) |
| Required Annual Income | $242,560 to afford median home |
| Mortgage Payment Burden | 51% of monthly income for principal and interest |
| Cash Sale Timeline | 7-14 days typical closing |
| Traditional Sale Timeline | 30-60+ days minimum |
| Agent Commission Cost | 5-6% of sale price (avoided with cash buyers) |
| Foreclosure Increase | 23% rise in Q3 2023 |
The Cash Sale Alternative: How It Works and When It Makes Sense
Cash home buyers provide an alternative to traditional sales that makes sense in specific situations:
The Cash Sale Process
- Initial Contact: You reach out to a cash buyer with basic property information
- Property Evaluation: The buyer evaluates your property, either through photos/video or a brief in-person visit
- Cash Offer: You receive a fair cash offer, typically within 24-48 hours
- Acceptance: If you accept, closing can happen in as little as 7-14 days on your timeline
- Closing: Simple closing process with no buyer financing, appraisals, or repair negotiations
Advantages of Cash Sales
Speed
Cash transactions close in 7-14 days instead of 30-60+ days for traditional sales. No waiting for buyer mortgage approvals, which can take weeks and sometimes fall through at the last minute.
Certainty
Cash offers eliminate financing contingencies. You don't have to worry about buyer financing falling through or bank appraisals coming in low.
Sell As-Is
Cash buyers purchase properties in any condition. Broken windows, outdated kitchens, stained carpets, roof repairs—none of it matters. You avoid thousands of dollars in pre-sale improvements.
No Showings
No parade of strangers through your home. No keeping the house pristine for weeks of showings. No disruption to your life.
Cost Savings
Most cash buyers cover all closing costs, and there are no real estate agent commissions (typically 5-6% of the sale price). What you're offered is often close to what you walk away with.
Flexibility
Cash buyers often allow you to select a closing date that works for your timeline, whether you need to close in one week or two months.
When Cash Sales Make the Most Sense
Cash sales aren't right for everyone. If you have time, your home is in excellent condition, and you want to maximize price, a traditional sale with a real estate agent may yield a higher offer.
But cash sales make excellent sense when:
- You're facing pre-foreclosure or financial hardship
- You've inherited a property you don't want to manage
- You need to relocate quickly for work or military orders
- You're going through divorce and want a fast, simple process
- Your home needs significant repairs you can't afford or don't want to manage
- You want certainty and speed over maximum price
- You're downsizing and want to avoid the stress of traditional sales
- You're an out-of-state landlord tired of managing a San Diego rental
Frequently Asked Questions
How can I sell my house fast in San Diego if I'm facing foreclosure?
If you're facing foreclosure in San Diego, contact a reputable cash home buyer immediately. California law provides a 90-day waiting period after receiving a Notice of Default, giving you time to act. Cash buyers can evaluate your property within 24-48 hours, make an offer, and close in as little as 7-14 days—often fast enough to avoid foreclosure entirely. Selling before foreclosure preserves your credit, allows you to walk away with any remaining equity, and gives you control over the process.
What's the difference between selling to a cash buyer versus listing with a real estate agent?
Traditional sales with agents typically take 30-60+ days, require home repairs and staging, involve showings and open houses, and carry 5-6% commission costs. Cash sales close in 7-14 days, require no repairs (buyers purchase as-is), involve no showings, and eliminate agent commissions. Cash offers are typically lower than retail market value, but you save time, repair costs, carrying costs, and stress. For homeowners who need speed and certainty—due to foreclosure, relocation, inheritance, or other pressures—cash sales often make better financial sense despite the lower offer price.
Can I sell an inherited property in San Diego before probate is complete?
Selling inherited property during probate is possible but requires court approval in most cases. Experienced cash buyers who work with inherited properties understand the probate process and can work with your attorney to structure a sale that meets court requirements. The timeline depends on whether the will allows independent administration (faster) or requires court supervision (slower), but cash buyers can provide offers contingent on probate approval and wait for the legal process to complete. This allows you to stop paying carrying costs and maintenance while the estate settles.
How much equity will I lose by selling to a cash buyer instead of listing traditionally?
Cash offers typically range from 70-85% of retail market value. However, traditional sales involve significant costs: 5-6% agent commissions, 1-3% closing costs, $5,000-50,000+ in repairs and updates, and ongoing mortgage payments, insurance, taxes, and utilities during the 30-60+ day sales process. When you factor in these costs plus the value of speed and certainty, the net difference between cash sales and traditional sales is often smaller than it appears—sometimes only 5-15% for homes needing repairs. For homeowners in urgent situations, this trade-off provides substantial value.
What happens to my mortgage when I sell my house for cash in San Diego?
When you sell your home—whether for cash or traditionally—the sale proceeds pay off your existing mortgage at closing. If your home's value exceeds your mortgage balance, you receive the equity difference (minus closing costs and any agreed-upon seller concessions). If you owe more than the home is worth, you'll need to either bring cash to closing or negotiate a short sale with your lender. Cash buyers can help you determine whether you have equity or need to pursue a short sale during the evaluation process.
Is now a good time to sell my San Diego home given the affordability crisis?
San Diego home values remain near record highs despite modest recent declines, meaning most homeowners have built substantial equity. However, the affordability crisis means fewer buyers can qualify, and sales volumes are among the slowest since 1988. For homeowners who must sell due to life circumstances—foreclosure, inheritance, relocation, divorce, downsizing—waiting for better market conditions isn't realistic. If you need to sell, the best time is now, using the method (cash or traditional) that best fits your timeline and situation. If selling is optional, consult with a local real estate professional about your specific property and neighborhood trends.
How do cash buyers determine their offer price?
Reputable cash buyers evaluate several factors: your home's location and neighborhood, size and layout, condition and needed repairs, comparable recent sales in your area, current market conditions, and their own costs (repairs, carrying costs, transaction fees, profit margin). Most cash buyers use a formula like: (After-Repair Value × 70-85%) - Repair Costs - Carrying Costs - Transaction Costs = Offer Price. Transparent buyers will explain their calculation and show you the comparable sales they used. Be cautious of buyers who won't explain how they arrived at their number.
What should I do if I can't afford my San Diego mortgage anymore?
If you're struggling with mortgage payments, act quickly—don't wait until you're months behind. Options include: (1) Contact your lender about loan modification or forbearance; (2) Apply for the California Homeowner Assistance Fund (up to $80,000 in assistance); (3) Sell your home before foreclosure—either traditionally or to a cash buyer; (4) Pursue a short sale if you owe more than the home is worth; or (5) Consult with a HUD-certified housing counselor for free guidance. The worst option is ignoring the problem—foreclosure has severe, long-lasting consequences that can be avoided by taking action early.
Your Home, Your Timeline, Your Decision
San Diego's housing affordability crisis affects current homeowners facing life transitions, financial pressure, or unexpected circumstances. You deserve options that respect your situation and timeline.
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Citations
- [1] NBC San Diego. (2025). Just 15% of San Diego households can afford a median-priced home in county: Study. Accessed 2025-12-09.
- [2] CBS 8 San Diego. (2025). San Diego sees stable home affordability at 13% in 2025's third quarter. Accessed 2025-12-09.
- [3] San Diego Union-Tribune. (2025, November 28). Here is how much San Diego home prices are outpacing wages. Accessed 2025-12-09.
- [4] San Diego Union-Tribune. (2025, December 1). Affordability is the biggest constraint: San Diego home prices fall for 4th month. Accessed 2025-12-09.
- [5] San Diego Real Estate Hunter. San Diego Housing Predictions 2025-2026: Top 10 Trends. Accessed 2025-12-09.
- [6] Trusted House Buyer San Diego. Pre-Foreclosure San Diego: House Buyer Guide. Accessed 2025-12-09.
- [7] Sell My House Fast SD. Sell a House for Cash in San Diego: Quick & Easy Process. Accessed 2025-12-09.
- [8] Shanner Law. Avoid Foreclosure San Diego: 6 Ways to Save Your Home. Accessed 2025-12-09.