Is the San Diego Housing Market Cooling Down? What It Means for Buyers and Sellers

After years of record-setting prices and frenzied bidding wars, the San Diego housing market in 2025 is finally cooling down—but not crashing.

The question on everyone’s mind:
What does this mean for buyers and sellers right now?

Let’s unpack the most recent Q1 2025 trends with verified data and news sources—so you can make smart, confident decisions in a shifting market.

Inventory Is Up—Way Up

According to Pacific Keys Realty, San Diego’s active inventory surged past 5,600 homes in May 2025, up more than 60% from a year ago. That’s the highest supply level we’ve seen since pre-pandemic 2020.

Why it matters:

More inventory = less urgency = more buyer negotiation power.

This increase is due to a combination of factors: homeowners cashing out, fewer bidding wars, and pent-up inventory finally hitting the market.

Homes Are Taking Longer to Sell

According to CBS8 San Diego, the average days on market for a San Diego home rose to 37 days in early Q2—up from just 18 days last year.

What this means:
Buyers aren’t rushing. They’re comparing, negotiating, and waiting for price cuts. That’s a major psychological shift from the “act fast or lose it” energy of 2021–2023.

Price Reductions Are on the Rise

Per data from Reventure, nearly 28% of all listings in San Diego had a price cut in Q1 2025—the highest rate since 2019.

In fact, ABC 10News reported that nearly half of sellers in April 2025 lowered their asking price to stay competitive.

Sellers can no longer “test the market” with high prices. Buyers are pushing back—hard.

Prices Are Leveling (But Not Falling Everywhere)

The median home price across San Diego County has hovered around $990,000 to $1 million in early 2025, with little month-over-month growth. NBC San Diego noted that appreciation has slowed dramatically compared to the double-digit growth of the pandemic years.

Some ZIP codes are seeing slight drops—especially for homes over $1.5M. But others, particularly in coastal or family-friendly neighborhoods, are still holding firm.

In other words, pricing is stabilizing—not crashing.

Buyer Psychology Has Changed

San Diego buyers in 2025 are:

• More sensitive to price due to high interest rates (still hovering around 6.5–7%)
  
  
• Less emotionally reactive—taking time to compare homes, inspect thoroughly, and negotiate
  
  
• More strategic—prioritizing neighborhoods with long-term value over trendy ZIP codes

According to MarketWatch, one of the biggest reasons for sluggish sales right now is that “some sellers refuse to accept market reality.”

What This Means for Sellers

If you're selling in San Diego right now:

You can still get great value—especially in desirable neighborhoods, single-level homes, or updated properties
You need to price it right the first time. Overpricing leads to longer days on market, price cuts, and missed buyer interest
Staging, prep, and timing matter more than ever. This is not the market to skip the basics.

What This Means for Buyers

If you’re a buyer in mid-2025:

You have more options. Bidding wars are rare, and you can take your time
You can negotiate, especially on homes that have sat longer than 15–20 days
Not all areas are “cooling” equally. Coastal and school-driven neighborhoods are still competitive—so act quickly when the right home shows up

Final Thought: The Market Isn’t Crashing—It’s Normalizing

After years of frothy pricing and low inventory, San Diego’s housing market is rebalancing. The power pendulum is swinging away from sellers and toward a more even playing field.

That doesn’t mean it’s a bad time to buy or sell—it means you need a strategy.

Buy smart. Sell smart. Work with someone who understands the shift—not just the comps.

Want Help Navigating San Diego’s 2025 Market?

Whether you're a buyer looking to negotiate smart—or a seller wondering how to price in this new environment—I’m here to guide you through every step.

📞 Schedule a personalized market strategy session
📲 And follow me on Instagram for real-time updates, local insights, and buyer/seller tips: @katiebean_realestate