As we close out 2025, San Diego County home buyers and sellers are looking ahead to 2026 with cautious optimism, while sellers are recalibrating expectations in a market that isn’t moving as fast as it once did. Mortgage rates have stabilized around 6.2% for 30-year fixed loans, home sales have slowed seasonally (down about 6% year-over-year in recent months), and inventory remains tight—but signs point to a more balanced market next year.
Lower rates, gradually increasing listings, and strong down payment assistance programs could create prime opportunities for buyers in San Diego and surrounding areas.
Current Market Snapshot (December 2025)
- Home Prices: Median list prices hover around $1.2–$1.3 million countywide, with some cooling in the second half of 2025. Detached homes in areas like North County saw slight price dips, while demand stays healthy in desirable neighborhoods.
- Sales Activity: Sales dropped notably in late 2025, partly due to holiday slowdowns and buyers waiting for better rates. However, closed sales in communities like Civita and Poway show resilience in mid-to-high price ranges.
- Mortgage Rates: As of mid-December, 30-year fixed rates sit at approximately 6.22%, down from earlier peaks but still elevated compared to pre-2022 levels.
- Inventory and Rents: Listings are trending lower seasonally, but rents have fallen for six straight months (averaging $2,520, down 0.3% YoY), making homeownership more attractive for some.
This creates a transitional moment: Sellers hold strong equity, but buyers gain leverage as the market shifts from the intense seller’s favor of recent years.
Key Predictions for 2026
Experts forecast a turning point in 2026, driven by economic factors and policy support:
Mortgage Rates Still Impact Affordability
Mortgage rates have eased somewhat compared to earlier peaks of over 7%, with forecasts suggesting rates near ~6.0%–6.3% in 2026. realtor.com+1
That makes financing more manageable than at the peak of 2025, although affordability remains a real concern for many San Diego buyers.
- Mortgage Rates Expected to Ease Further Projections suggest 30-year fixed rates could dip toward 6.1% or lower by mid-2026. Even small declines unlock significant purchasing power—dropping from 6.5% to 6.1% on a $800,000 loan saves hundreds per month. If you’ve found a good rate now, locking it in (or exploring float-down options) protects against volatility.
- Inventory Likely to Rise Modestly More listings are anticipated as lower rates encourage move-up sellers and life changes bring properties to market. This could ease the low-inventory crunch, giving buyers more options and reducing multiple-offer frenzy in entry-level segments.
- Home Prices: Stabilization with Moderate Growth Expect prices to hold steady or rise 2–5% countywide, with coastal and North County areas (Carlsbad, Encinitas, La Jolla) remaining premium. East County and inland spots like El Cajon or Spring Valley may offer better affordability for fixer-uppers or first-time buyers.
- Sales Volume to Rebound National forecasts predict a 1–2% uptick in existing-home sales, with San Diego potentially outperforming due to population growth and job strength in tech, healthcare, and military sectors.
- Affordability Boost from Assistance Programs California’s down payment assistance landscape is stronger than ever, with a record 2,600+ programs active in late 2025. Standouts include:
- CalHFA Dream For All: Up to 20% shared appreciation loan (capped at $150,000) for down payment/closing costs—vouchers via lottery.
- CalHFA MyHome: Deferred junior loans up to 3–5%.
- San Diego Housing Commission: Up to $40,000 deferred for moderate-income buyers.
- Local options in Riverside County and GSFA Platinum for broader eligibility.
These are ideal for first-time buyers facing high prices—pair them with VA/USDA zero-down loans if qualified.
What Sellers Should Know Now
Pricing Matters More Than Ever
Because price growth has paused and more inventory is available, accurate pricing at launch is critical. Overpricing often leads to price reductions and longer days on market.
Inventory Trends Affect Strategy
Even though inventory has climbed, San Diego still doesn’t have a massive surplus compared to broader U.S. levels. That means well-positioned homes — well-priced and well-presented — are still selling efficiently.
Neighborhood & Submarket Nuances
Different areas of San Diego County are behaving differently:
- Coastal areas and premium school districts often still command strong interest and hold value even in slower markets.
- Inland and emerging neighborhoods are attracting buyers seeking space and value, moving decisions earlier in 2026. (Local forecasts and anecdotal trend data support this continued interest.) Reddit
What This Means for Buyers
2026 could favor buyers more than recent years. With potential for better rates and selection, it’s a smart time to prepare: Get pre-approved, explore assistance programs, and target emerging neighborhoods like Oceanside, Mira Mesa, or Chula Vista for value.
Don’t wait to “time” the bottom—focus on properties that fit your long-term needs. San Diego’s lifestyle and appreciation potential make it a solid investment.
Advice for Sellers
Equity is at all-time highs for many longtime owners. If you’re considering selling, price competitively to attract motivated buyers unlocking lower rates. Highlight upgrades and location to stand out.
Buyer Preferences in 2026
Buyers continue to prioritize:
- Functional home offices and flexible living spaces
- Outdoor living and wellness features
- Practical smart home tech (like smart lighting and security systems) that adds convenience without complexity The Spruce
Market Dynamics Buyers & Sellers Should Watch
Balanced Market Metrics
- Months of Supply Inventory (MSI) rose compared to earlier seller market conditions, pushing toward a more balanced or buyer-friendly market in many segments. Pacific Keys Realty
- Time on market has lengthened compared with peak frenzy years, giving buyers more time to evaluate offers.
Foreclosure Activity
While not specific to San Diego alone, foreclosure activity has risen nationally, which can influence overall inventory and negotiation dynamics. Investopedia
Strategic Tips for 2026
For Buyers:
- Get pre-approved early. In a balanced market, sellers often prioritize offers with solid financing.
- Be ready to move on a great deal, even if markets feel slower — well-priced homes still attract competitive offers.
For Sellers:
- Price competitively from day one. Data shows that listings priced right earn stronger buyer interest and fewer reductions.
- Invest in staging and marketing. Homes that stand out online and in tours still sell faster.
Final Thoughts: Is 2026 Your Year to Buy in San Diego County?
With rates trending down, assistance programs at peak availability, and inventory poised to improve, 2026 looks promising for San Diego home buyers—especially first-timers and those in affordability-focused segments. The market isn’t crashing, but it’s balancing, creating windows of opportunity.
Ready to navigate these changes? As local experts in San Diego County real estate, we specialize in helping buyers secure down payment assistance, lock favorable rates, and find the right home—from coastal gems to inland values. Contact us today for a personalized market consultation.
Whether you’re planning to sell soon or ready to buy, now is the time to work with local experts who understand the unique micro-markets within San Diego County and can provide tactical guidance based on current data and trends.
If you want a customized analysis for your neighborhood or specific property, Brad & Karen Mattonen at homesinsdcounty.com are here to help you navigate these opportunities and risks with confidence.
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