In May 2025, San Diego’s housing market followed statewide patterns, with inventory levels rising and median prices rising as home sales decreased. Home prices in the area increased somewhat despite the decline in buyer activity, making San Diego one of the few Southern California areas to report an annual price increase.
Highlights
- Homes took longer to sell than in May 2024.
- The median home price in San Diego rose slightly to $1,050,000, up 2.4% year-over-year and 3.4% month-over-month.
- San Diego’s housing market cooled in May as home sales declined and price growth slowed.
San Diego’s Housing Market Slows Down
California’s housing market slowed in May 2025. According to the CAR report, home sales dropped to their lowest level in four months, falling 5.1% from April and 4% from May last year.
May 2025 saw the slowest pace of recent months in San Diego’s housing market, with home sales declining 7.3% from April and 4.6% from a year earlier. Buyer activity was hampered by high mortgage rates and general economic uncertainties, including the effects of tariffs. The statewide average for the 30-year fixed mortgage rate was 6.82%. This drop represented the larger statewide slowdown and put an end to a run of steady or growing sales patterns.
San Diego’s median home price increased 3.4% from April and 2.4% year over year to $1,050,000 in May. The housing supply increased due to a notable rise in active listings compared to the previous year. Due to waning demand, it would now take longer to sell the available properties, as the unsold inventory index (UII) increased from 2.4 months to 3.4 months. This is consistent with the statewide trend of slower sales and more listings.
San Diego home sales were down 4.6% from May 2024 and 7.3% from April, indicating a drop in regional sales activity. Southern California markets, including San Diego, were not exempt from the decline, although the Bay Area and Central Coast had more severe declines from year to year.
Improvements in Buyer Sentiment
Even with the impact of high mortgage rates and economic concerns, buyer confidence showed some improvement in May 2025. According to the report by C.A.R., 26% of consumers said it was a good time to buy a home, which is the highest level in over two years.
The report also said that buyers are being more cautious as homes are taking longer to sell. They spend 18 days on the market compared to 16 days a year ago.
C.A.R. Senior Vice President and Chief Economist Jordan Levine, in the report, said, “Although the market has slowed in recent months, there’s potential for a rebound if economic concerns subside.”
More homes and slightly lower prices could mean better deals for buyers. On the other hand, sellers will have to deal with slower sales and longer time on the market, which may lead them to lower price expectations.
