San Diego Housing Inventory Surge 66.6%: 5 Major Development Battles Reshape Point Loma to College Area 2026

The Numbers: 66.6% Inventory Surge Creates Buyer's Market Backdrop

San Diego's real estate landscape has fundamentally shifted. The total number of active real estate listings in the San Diego metro area spiked by 66.6% over the past year, among the highest increases in the nation's 50 largest metro areas.

Current market conditions reveal balanced dynamics with 4,683 active listings countywide as of January 2026, compared to 3,252 active listings in January 2025. The Unsold Inventory Index reached 3.6 months by November 2025, up from 3.2 months in October and 3.3 months the previous November.

While the traditional threshold for a buyer's market sits at 6 months of supply, the dramatic inventory increase has already transformed San Diego from the ultra-tight seller's market of 2021-2023. Major brokerages Redfin and Compass declared 2026 "The Great Housing Reset" as San Diego rents fell for 6 consecutive months, home prices declined 5 months straight, and inventory surged.

For homeowners near major development zones, this macro market shift compounds local concerns. Selling in a balanced-to-buyer's market requires more competitive pricing and presentation—challenges that intensify when potential buyers worry about years of construction noise, traffic, and property value uncertainty in your specific neighborhood.

Development Battle #1: Midway Rising—4,254 Units Transform Point Loma & Ocean Beach

The $3.9 billion Midway Rising project represents the largest and most ambitious development on San Diego's 2026 radar. The Midway Rising Specific Plan would allow approximately 4,254 housing units, including up to 2,000 affordable units, as part of redeveloping the 48-acre Sports Arena site in San Diego's Midway district.

The project will be built in two phases over a 10-year period. Phase 1 focuses on the eastern portion of the site, including a new 380,550-square-foot entertainment center, 90,888 square feet of retail, the nearly 3-acre "The Square" park, and 875 residential units. Phase 2 adds the bulk of the remaining residential units alongside a large neighborhood park called "The Green" and additional commercial space, expected to complete five years after the first phase.

Construction Timeline and Impact Zone

If approved, Midway Rising anticipates breaking ground on the project in late 2026, though the document identifies a construction start date in winter 2026, and delays associated with environmental work have made that timeline challenging. The City Council is expected to vote on the project early this year, and Midway Rising's developers have until the end of December 2026 to negotiate a long-term lease with the city for the sports arena property.

Environmental analysis reveals significant impacts on surrounding areas. Project buildings—including the proposed 250-foot high-rise building, 105-foot mid-rise mixed-use buildings, and 165-foot entertainment center—would be constructed on relatively low ground and may have perceived adverse and beneficial effects on the scenic quality of the surrounding area. The distant views of Point Loma would be partially obstructed by the proposed development.

For homeowners in Point Loma and Ocean Beach, the 10-year construction timeline represents a decade of uncertainty—construction employment could reach 500-800 workers per major project during peak phases, creating daily traffic disruption along Sports Arena Boulevard and surrounding corridors.

Development Battle #2: San Diego Unified School District—1,500 Workforce Housing Units Across Multiple Sites

San Diego Unified School District is preparing to negotiate development agreements that could add more than 1,500 units of affordable workforce housing to five district-owned properties, including sites in Hillcrest, Linda Vista, and Barrio Logan.

The proposed housing efforts could yield 1,500 units or more across nearly 14 acres in University Heights, with the district seeking to create affordable housing for 10% of its workforce over the next decade. The project could potentially generate $504 million over 99 years, with the district retaining land ownership while receiving ground lease payments over terms of up to 99 years, with no district funds required for construction.

This would represent an unprecedented leap forward in building housing on district-owned land—California school districts have only built about 850 units total to date, meaning San Diego Unified alone would nearly double statewide school district housing production.

Recent Developments

However, the board ultimately didn't make a decision or give developers additional direction in late 2025, instead planning to conduct a workshop in the near future, putting the timeline on hold temporarily. The Learning Curve reported that San Diego Unified's housing workshop will help determine next steps for the ambitious multi-site development plan.

For homeowners near these school district sites—particularly in Hillcrest, Linda Vista, and Barrio Logan—the uncertainty about project timelines and construction sequencing creates challenging planning scenarios. Will your neighborhood site break ground first, or will years pass before development begins? The lack of clear construction schedules makes it difficult for nearby homeowners to time traditional sales effectively.

Development Battle #3: Golden Hill Lawson Project—186 Units Test Complete Communities in Court

The Lawson is an eight-story, 186-unit development at 2935-2961 A Street in Golden Hill that sparked organized opposition from neighborhood groups in 2025. Located directly under the final approach into San Diego Airport, the project achieved its height and density through the city's "Complete Communities" program, which lets developers surpass development restrictions in exchange for certain benefits and concessions.

The project involved demolishing three existing affordable homes to make way for the new 8-story apartment building—a point of contention for neighbors who argue the Complete Communities program fails to deliver promised community benefits.

Legal Battle Creates Uncertainty

Neighborhood groups won a rare victory in October 2025 when their lawsuit convinced Superior Court Judge Joel Wohlfeil to issue a restraining order halting construction. However, the judge later declined to extend the work order after determining the group does not have "a probability of prevailing" at trial.

The key controversy centers on a significant timing problem: the building could be completed in 2027, but the major transit stop planned for the neighborhood won't be built until 2035—if at all. This 8-year gap undermines the Complete Communities program's transit-oriented development rationale, leading the judge to question the project's legal foundation during hearings.

As of early 2026, the project remains in legal limbo with construction stopped but the developer likely to eventually prevail. For Golden Hill and adjacent University Heights homeowners, this on-again, off-again construction status creates maximum uncertainty—property buyers considering your area don't know whether construction will resume next month or next year, creating pricing pressure as risk-averse buyers look elsewhere.

Development Battle #4: Pacific Beach Turquoise Tower—23-Story 'Pencil Tower' Claims Automatic Approval

A developer is proposing a 23-story high-rise at 970 Turquoise Street in Pacific Beach, a project that has sparked significant controversy since 2024. Project Vela would stand slightly over 238 feet tall with 139 hotel rooms on 9 floors and 74 housing units on the other floors, including 10 affordable units (5 very low income and 5 moderate income).

The developer, Kalonymus LLC—"a boutique real estate investment and development firm specializing in multifamily, mixed-use and opportunistic investments"—is arguing that the project must be considered "automatically approved," claiming the city failed to meet a deadline prescribed in state law meant to ensure speedy project review.

City planners dispute this claim, stating that's the developer's fault. Officials claim Kalonymus submitted incomplete or incorrect plans and changed the project each time it resubmitted. The proposed 23-story Turquoise Tower project in Pacific Beach remains under city review, and on September 24, 2025, the City Planning Department issued its second round of questions to the developer, pressing for clarification on several disputed claims and bonuses.

For Pacific Beach homeowners within several blocks of 970 Turquoise Street, the automatic approval claim creates immediate uncertainty. If the city approves the project under pressure from state deadlines, construction could begin in 2026 with minimal environmental review—leaving neighbors little time to plan exit strategies if they wish to avoid years of construction impacts.

Development Battle #5: College Area & Clairemont Community Plans—31,750 Homes Approved

The San Diego City Council approved the Clairemont Community Plan Update and the College Area Community Plan Update in December 2025, marking the first comprehensive overhaul of both community plans in more than 30 years. The combined plans add capacity for approximately 31,750 new homes.

The Clairemont update adds capacity for 14,000 new homes in areas close to trolley stations, while the College Area update adds capacity for up to 17,750 new homes near San Diego State University and along key corridors, including College Avenue, Montezuma Road, and El Cajon Boulevard. The zoning changes in the two neighborhoods add capacity for more than 31,000 new homes.

The updates set a long-term vision that supports increased opportunities for new homes, safer and more connected mobility options, vibrant village centers, and new recreational opportunities. The plans were approved by 7-1 votes and are intended to guide development over the next 30 years.

What This Means for Homeowners

Unlike the specific project battles in Point Loma, Golden Hill, and Pacific Beach, the College Area and Clairemont plans don't represent single mega-projects. Instead, they create a regulatory framework allowing thousands of individual projects to move forward over the coming decades.

This diffuse development pattern means virtually every homeowner in College Area and Clairemont could eventually have new construction within a few blocks—but you won't know which parcels will develop first. The first wave of projects will likely target properties along major corridors (College Avenue, Montezuma Road, El Cajon Boulevard) and near trolley stations, putting homes in these zones at immediate risk of construction impacts.

The community plans doubled previous housing capacity from 16,700 to 31,750 homes, reflecting aggressive upzoning that will transform these neighborhoods over the next generation. Early movers who sell before the first wave of corridor development begins may avoid the worst construction impacts and property value uncertainty.

The Compound Effect: Why Multiple Simultaneous Projects Create Unique Selling Pressure

Individually, each of these five development battles would represent significant neighborhood disruption. Together, they create a San Diego-wide phenomenon that hasn't occurred in decades: multiple simultaneous mega-projects targeting different neighborhoods within the same real estate market cycle.

Market Saturation of Development-Adjacent Properties

When only one neighborhood faces major construction, homeowners there compete mainly with other San Diego sellers in "normal" areas. But when five neighborhoods simultaneously deal with development uncertainty, that's potentially tens of thousands of homeowners all considering whether to sell before construction begins—creating a glut of development-adjacent inventory.

Buyer Risk Aversion Spreads Citywide

Sophisticated buyers researching San Diego housing in 2026 will discover development battles citywide. This creates generalized caution about buying near any major corridor or transit hub, not just the five specific battle zones. Property values in development-adjacent areas may suffer pricing pressure simply from association with the broader development uncertainty narrative.

Cascading Timeline Uncertainty

Because each project faces different approval processes, legal challenges, and construction timelines, homeowners can't easily compare scenarios. Midway Rising has a 10-year phased timeline; Turquoise Tower claims automatic approval; Golden Hill is tied up in court; school district sites have delayed workshops. This timeline chaos makes it nearly impossible to implement a "wait and see" strategy—you might wait years only to discover your neighborhood project breaks ground just as you decide to sell.

Cash Buyer Advantage Intensifies

In a balanced-to-buyer's market (3.6 months supply) with development uncertainty layered on top, traditional buyers become even more cautious. Financing contingencies, inspection periods, and appraisal challenges multiply in development-adjacent zones. Cash buyers, however, can move quickly to acquire properties at discounts reflecting construction risk—then either hold for long-term appreciation post-development or flip after making improvements that help properties stand out despite nearby construction.

The compound effect creates a narrow window in 2026 where selling before widespread construction begins remains viable, but that window closes as projects secure final approvals and break ground throughout the year.

Construction Timeline Analysis: Which Projects Break Ground First?

Understanding likely construction timelines helps homeowners prioritize decisions:

Most Likely to Break Ground in 2026

• Midway Rising: Developers have until December 2026 to negotiate the long-term lease, with construction anticipated for late 2026 assuming City Council approval early in the year. Most likely to actually start construction in 2026.
• Turquoise Tower: The automatic approval claim creates pressure for immediate permitting. If Kalonymus prevails, construction could begin as early as mid-2026.

Significant Uncertainty (2026-2027)

• Golden Hill Lawson Project: Legal challenges continue, but the judge's indication that plaintiffs lack probability of prevailing suggests construction could resume in 2026 once remaining legal procedures conclude. Timeline: likely late 2026 or early 2027.
• San Diego Unified Sites: The delayed workshop and lack of final development agreements push construction starts to late 2026 or 2027 at the earliest.

Longest Timeline (2026-2030+)

• College Area/Clairemont: The community plans create capacity for 31,750 homes but don't mandate specific project timelines. Early projects along major corridors may begin in 2026-2027, but the full buildout will span decades.

For homeowners in the Midway Rising and Turquoise Tower impact zones, the decision window is narrowest—construction could begin within months. Golden Hill and school district site homeowners have slightly more time but face timeline unpredictability. College Area and Clairemont residents must assess their specific location's development likelihood based on zoning and corridor proximity.

Cash Buyer Strategy: Why Homeowners Near Development Projects Are Selling Now

Homeowners in development impact zones increasingly turn to cash buyers for several strategic reasons:

Timeline Certainty

Traditional sales in a balanced market (3.6 months supply) typically take 43-49 days from listing to close, with additional time for repairs, contingencies, and potential buyer financing issues. Cash sales can close in 7-14 days, allowing homeowners to exit before construction begins. For Midway Rising and Turquoise Tower homeowners facing potential late-2026 construction starts, a cash sale in early 2026 provides certainty.

No Disclosure Complications

California requires extensive disclosures about neighborhood conditions that could affect property value. How do you disclose "a 10-year, 4,254-unit mega-development might start construction a mile away in six months, but we're not sure"? Cash buyers familiar with development projects make offers with this uncertainty already priced in, avoiding disclosure disputes that can derail traditional sales.

Appraisal Challenges Eliminated

Traditional buyers need appraisals for financing, but appraisers struggle to value properties in development-adjacent zones during uncertain pre-construction periods. Comparable sales may not reflect construction risk premiums, creating financing gaps. Cash buyers eliminate appraisal risk entirely.

As-Is Sales Work Better

Construction-adjacent properties benefit less from traditional staging and cosmetic upgrades—buyers worried about years of construction dust and traffic don't pay premiums for fresh paint. Cash buyers typically purchase as-is, allowing homeowners to avoid pre-sale improvement costs that may not generate returns in development-adjacent markets.

Competitive Advantage in Buyer's Market

With inventory up 66.6%, traditional sellers face months on market and potential price reductions. Cash offers provide certainty that listing at market price for 90+ days may not generate, especially as more development-adjacent homeowners list competing properties throughout 2026.

Frequently Asked Questions

Conclusion: Making the Right Decision for Your Situation

San Diego's 2026 housing landscape presents a unique convergence: a 66.6% inventory surge creating buyer's market dynamics, combined with five simultaneous development battles that will add 37,000+ housing units across multiple neighborhoods over the next decade.

For homeowners in development impact zones—Point Loma, Ocean Beach, Hillcrest, Linda Vista, Barrio Logan, Golden Hill, University Heights, Pacific Beach, College Area, and Clairemont—the compound effect of macro market shift and hyper-local construction uncertainty creates a critical decision window.

The numbers are clear: Midway Rising's 10-year construction timeline, the Turquoise Tower's automatic approval dispute, Golden Hill's legal battle, San Diego Unified's 1,500-unit multi-site plan, and College Area/Clairemont's 31,750-home capacity represent transformational change. These aren't abstract long-term plans—most aim to break ground in late 2026 or early 2027.

Homeowners who need to sell within 3-5 years face the most acute pressure. Traditional sales in a balanced market (3.6 months supply) already require 43-49 days and competitive pricing. Add construction uncertainty, traffic impacts, and property value questions, and the path to successful traditional sales becomes more challenging.

Cash buyers offer an alternative: 7-14 day closes, no appraisal or financing contingencies, as-is purchases, and timeline certainty. While cash offers typically come at discounts to market value, they eliminate the risk of listing for months in a development-adjacent zone where inventory continues climbing and competing sellers face the same construction concerns.

The strategic question isn't whether these developments will reshape San Diego neighborhoods—City Council approvals, developer financing, and state housing law pressure make most projects inevitable. The question is whether you want to be a homeowner in the impact zone during the construction years, or whether selling before groundbreaking makes more sense for your financial timeline and quality of life priorities.

For homeowners considering cash offers, connecting with experienced San Diego cash buyers who understand development project impacts, construction timelines, and neighborhood-specific risk factors can provide clarity on your options. The decision window narrows as projects secure final approvals throughout 2026—acting early provides the most flexibility and certainty.