For years, San Diego witnessed an unprecedented surge in housing prices, but the pandemic-driven boom seems to be tapering off.
The lifestyle changes prompted by Covid-19 restrictions led to a dramatic increase in demand for homes in this picturesque California city.
Despite this growing interest, the supply of new homes didn’t keep pace, unable to meet the needs of the many newcomers.
This imbalance pushed the median home price from $660,000 in January 2020 to a staggering $860,000 by January 2022, according to data from Zillow.
As of October, Zillow reports that the median home price has climbed even higher to an impressive $920,333.
“The price hikes we witnessed in 2021 and 2022 were truly remarkable,” commented Realtor Bern McGovern to the Daily Mail.
‘I mean, you’d see one home sell, and the next one down the street would go for fifty grand more… and then another one right after that. It felt like the market was on fast-forward, and that pace just wasn’t sustainable long term.’
Despite being almost double the national average, the figure represents a decline in San Diego average house prices for the fifth consecutive month, according to S&P Cotality Case-Shiller Indices report.
The average San Diego home value is down four percent compared to 2024, according to Zillow.
Realtor Bern McGovern said the 2025 has been, ‘one of the slowest homebuying years in history’.
San Diego’s housing market experienced a huge Covid-era boom which is finally beginning to stagnate
‘What we’ve seen over the last 18 months is more of a reset than a crash. Things have cooled off, especially in some of those premium suburban neighborhoods — places like Carmel Valley, Del Sur, and Pacific Highlands Ranch,’ McGovern told Daily Mail.
‘These areas saw huge run-ups during the peak, so naturally they’ve had a little more air come out of the balloon.’
In a YouTube video, McGovern explained that housing inventory has doubled and demand has softened.
‘In early 2024, San Diego had about 1.7 months of supply inventory, by mid 2025 that number climbed to three-and-a-half, almost doubling in less than 18 months.’
The decline did slow in October compared to the month before which an expert told The San Diego Union-Tribune could have be down to lower mortgage rates.
In October, the average price of a home in San Diego was about 0.6% lower than last year, compared to the 0.85% drop in September.
The rates haven’t led to a surge in sales, but Lisa Sturtevant, chief economist at Bright MLS, thinks they could support the housing market in 2026.
‘Closed sales are down about five to 10 percent,’ McGovern added.
Home sales are declining along with prices, despite a spike in housing inventory.
‘Homes have started to stay on the market way longer,’ McGovern said. ‘It jumped to 40 percent compared to the start of 2025.’
San Diego realtor Bern McGovern said that 2025 has been one of the slowest homebuying years in history for the area
A three bedroom and two bathroom home (pictured) in San Diego has been on the market for so long that realtors were forced to cute the price by $50k
‘Homes that used to sell in under a month are sitting [on the market] for 30, sometimes 38 days.’
McGovern also pointed out something that usually when the number of homes on the market doubles, sales drop about 8 to 12 percent, as they did in 2019 and 2020.
But that hasn’t been the case, prices have either slowly declined or stayed flat.
He explained that two forces are at play, buyers are waiting for prices to drop further, and sellers holding on to homes because they have low three percent mortgages.
The stagnation is evident on several Zillow listings which have seen their prices slashed after languishing on the market.
One is a stunning four bedroom and three full bathroom home on Byrd Street, near prime Downtown/Centre City with lots of restaurants and nightlife.
With a chef’s kitchen, stainless steel appliances, granite countertops, the home even offers ocean views, walk in closets, and a backyard with a hot tub, the listing read.
Despite everything this home has to offer, it has been on the market for 63 days and the price was chopped $14,000 from the original listing.
Another struggling sale is a $899,000 updated and meticulously maintained Ranch style home with three bedrooms, four bathrooms, in a private cul-de-sac.
Once desirable homes in the coastal city are languishing on the market for months
The price of this four bedroom and three bathroom San Diego home was cut by $14k after more than two months on the market
‘Designer touches throughout, with newer appliances, custom cabinetry, waterfall island, and custom craftsman’s tile work in both bathrooms. Enjoying the spacious yard invites endless possibilities and gorgeous mountain views,’ per the listing.
This ‘perfect place to call home’ has been on the market for 62 days and had the price was cut down a whopping $50,000 on December 12.
A senior economist at Realtor.com told the Tribune recent rises in home buying were driven by lower mortgage rates and seasonal factors, not more affordable prices.
‘Momentum in the housing market is struggling to pick up’, Joel Berner said, ‘as affordability constraints and a softening labor market weigh on demand.’
The decrease in San Diego’s housing market represents the latest change in fortunes.
The city was growing steadily before 2019, with nearly one percent more people moving there each year, per the Census Bureau.
But when the COVID-19 pandemic hit, San Diego’s population fell and saw its biggest drop between 2019 and 2020.
However as work from home initiatives became the new normal, a desire for more space drove migration back to the area.
