San Diego Real Estate Trends in 2025: A Comprehensive Review

As we wrap up 2025, San Diego's real estate market has shown some fascinating trends. Throughout the year, we've observed shifts in pricing, inventory levels, and interest rates that have impacted both buyers and sellers.

Pricing Trends:
In 2025, San Diego saw a modest increase in median home prices, driven by strong demand and limited housing supply. Many neighborhoods appreciated, though at a slightly slower pace than in previous years.

Inventory Changes:
Inventory remained tight throughout the year, with a low number of homes for sale relative to the high demand. This led to more competitive bidding and, in some cases, above-asking-price offers becoming more common.

Interest Rates:
Interest rates remained relatively stable in 2025, with slight fluctuations driven by economic conditions. This stability helped maintain affordability for many buyers, though rising prices still posed challenges.

Notable Shifts:
We also saw increased interest in suburban and outlying areas as buyers sought more space and affordability. The demand for homes with dedicated office spaces and outdoor amenities also grew.

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams 

What Do Experts See on the Horizon for the Second Half of the Year?

As we move into the latter half of the year, questions about what’s to come are top of mind for buyers and sellers. Near record-low mortgage rates coupled with rising home price appreciation kicked off a robust housing market in the first half of 2021, but what does the forecast tell us about what’s on the horizon?

Mortgage Rates Will Likely Increase, but Remain Low

Many experts are projecting a rise in interest rates. The latest Quarterly Forecast from Freddie Mac states:

“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”

However, even as mortgage rates rise, the anticipated increase is expected to be modest at most, and still well below historical averages. Rates remaining low is good news for homebuyers who are looking to maximize their purchasing power. The same report from Freddie Mac goes on to say:

“While higher mortgage rates will help slow the pace of home sales and moderate house price growth, we expect overall housing market activity will remain robust. Our forecast has total home sales, the sum of new and existing home sales, at 7.1 million in 2021….”
Home Price Appreciation Will Continue, but Price Growth Will Likely Slow

Joe Seydl, Senior Markets Economist at J.P. Morgan, projects home prices to continue rising as well, indicating buyers interested in purchasing a home should do so sooner rather than later. Waiting for rates or home prices to fall may not be wise:

“Homebuyers—interest rates are still historically low, though they are inching up. Housing prices have spiked during the last six-to-nine months, but we don’t expect them to fall soon, and we believe they are more likely to keep rising. If you are looking to purchase a new home, conditions now may be better than 12 months hence.”

Other experts remain optimistic about home prices, too. The graph below highlights 2021 home price forecasts from multiple industry leaders:

Inventory Remains a Challenge, but There’s Reason To Be Optimistic

Home prices are rising, but they should moderate as more housing inventory comes to market. George Ratiu, Senior Economist at realtor.com, notes there are signs that we may see the current inventory challenges lessen, slowing the fast-paced home price appreciation and creating more choices for buyers:

“We have seen more new listings this year compared with 2020 in 11 of the last 13 weeks. The influx of new sellers over the last couple of months has been especially helpful in slowing price gains.”

New home starts are also showing signs of improvement, which further bolsters hopes of more options coming to market. Robert Dietz, Chief Economist at the National Association of Home Builders (NAHB), writes:

“As an indicator of the economic impact of housing, there are now 652,000 single-family homes under construction. This is 28% higher than a year ago.”

Finally, while it may not fundamentally change the market conditions we’re currently experiencing, another reason to be optimistic more homes might come to market: our improving economy. Mark Fleming, Chief Economist at First American, notes:


“A growing economy in the summer months has multiple implications for the housing market. Growing consumer confidence, a stronger labor market, and higher wages bode well for housing demand. While a growing economy and improving public health conditions may also spur hesitant existing owners to list their homes for sale, it’s unlikely to significantly ease the super sellers’ market conditions.”

Bottom Line

As we look at the forecast for prices, interest rates, inventory, and home sales, experts remain optimistic about what’s on the horizon for the second half of 2021. Let’s connect today to discuss how we can navigate the market together in the coming months.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Where Do Experts Say the Housing Market Is Heading

As we enter the middle of 2021, many are wondering if we’ll see big changes in the housing market during the second half of this year. Here’s a look at what some experts have to say about key factors that will drive the industry and the economy forward in the months to come.
realtor.com

“. . . homes continue to sell quickly in what’s normally the fastest-moving time of the year. This is in contrast with 2020 when homes sold slower in the spring and fastest in September and October. While we expect fall to be competitive, this year’s seasonal pattern is likely to be more normal, with homes selling fastest from roughly now until mid-summer.”
National Association of Realtors (NAR)

“Sellers who have been hesitant to list homes as part of their personal health safety precautions may be more encouraged to list and show their homes with a population mostly vaccinated by the mid-year.”
Danielle Hale, Chief Economist at realtor.com

“Surveys showed that seller confidence continued to rise in April. Extra confidence plus our recent survey finding that more homeowners than normal are planning to list their homes for sale in the next 12 months suggest that while we may not see an end to the sellers’ market, we might see the intensity of the competition diminish as buyers have more options to choose from.”
Freddie Mac

“We forecast that mortgage rates will continue to rise through the end of next year. We estimate the 30-year fixed mortgage rate will average 3.4% in the fourth quarter of 2021, rising to 3.8% in the fourth quarter of 2022.”

Bottom Line

Experts are optimistic about the second half of the year. Let’s connect today to talk more about the conditions in our local market.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017, 2018,& 2019 Recognition of Excellence Award Winner SDAR

Winning as a Buyer in a Sellers Market with David Demangos

Learn the steps to Winning as a Buyer in a Sellers Market with David Demangos

Looking to Buy, Sell, or Invest? Contact:

David Demangos - eXp Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
We Go to Extremes to Fulfill Real Estate Dreams!

Everybody Calm Down! This Is NOT 2008

Last week realtor.com released the results of a survey that produced three major revelations:

53% of home purchasers (first-time and repeat buyers) currently in the market believe a recession will occur this year or next.
57% believe the next recession will be as bad or worse than 2008.
55% said they would cancel plans to move if a recession occurred.

Since we are currently experiencing the longest-ever economic expansion in American history, there is reason to believe a recession could occur in the not-too-distant future. And, it does make sense that buyers and sellers remember the horrors of 2008 when they hear the word “recession.”

Ali Wolf, Director of Economic Research at the real estate consulting firm Meyers Research, addressed this point in a recent interview:

“With people having PTSD from the last time, they’re still afraid of buying at the wrong time.”

Most experts, however, believe if there is a recession, it will not resemble 2008. This housing market is in no way the same as it was just over a decade ago.

Zillow Economist, Jeff Tucker, explained the difference in a recent article, Recessions Typically Have Limited Effect on the Housing Market:

“As we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what’s different about the housing market today. Rather than abundant homes, we have a shortage of new home supply. Rather than risky borrowers taking on adjustable-rate mortgages, we have buyers with sterling credit scores taking out predictable 30-year fixed-rate mortgages. The housing market is simply much less risky than it was 15 years ago.”

George Ratiu, Senior Economist at realtor.com, also weighed in on the subject:

“This is going to be a much shorter recession than the last one, I don’t think the next recession will be a repeat of 2008…The housing market is in a better position.”

In the past 23 years, there have been two national recessions – the dot-com crash in 2001 and the Great Recession in 2008. It is true that home values fell 19.7% during the 2008 recession, which was caused by a mortgage meltdown that heavily impacted the housing market. However, while stock prices fell almost 25% in 2001, home values appreciated 6.6%. The triggers of the next recession will more closely mirror those from 2001 – not those from 2008.

Bottom Line
No one can accurately predict when the next recession will occur, but expecting one could possibly take place in the next 18-24 months is understandable. It is, however, important to realize that the impact of a recession on the housing market will in no way resemble 2008.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® DRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016, 2017 & 2018 Recognition of Excellence Award Winner SDAR

What Does the Recent Rash of Price Reductions Mean to the Real Estate Market?

Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country. According to the report:

There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros. 

About 14% of all listings had a price cut in June.Since the beginning of the year, the share of listings with a price cut increased 1.2%
This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

Senior Economist Aaron Terrazas further explained:

“A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

What this DOESN’T MEAN for the real estate market…

This doesn’t mean home values have depreciated or are about to depreciate.

A seller may put a home worth $300,000 on the market for $325,000 hoping a bidding war will occur and an overanxious buyer will pay more than its actual value. That has happened often over the last few years. If the seller gets no offers and reduces the price to $300,000, it doesn’t mean the home dropped in value. It is still worth $300,000.

Home prices will continue to appreciate over the next 12 months. In this same report, Terrazas remarks:

“It’s far too soon to call this a buyer’s market, home values are still expected to appreciate at double their historic rate over the next 12 months, but the frenetic pace of the housing market over the past few years is starting to return toward a more normal trend.”
What this DOES MEAN for the real estate market…

This does mean that sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

Again, quoting Aaron Terrazas in the report:

“The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.”

Bottom Line
Prices are not depreciating. However, if you want to sell your house quickly and with the least amount of hassles, pricing it correctly from the beginning makes the most sense.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016 & 2017 Recognition of Excellence Award Winner SDAR

Calm Down! The Real Estate Market is NOT Falling Apart

There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?  

Financial advisors have been warning us for months that the stock market was ripe for a “correction.”

Experts have been questioning the value of alternative currencies for over a year.

In contrast, here are the opinions of three major players in the residential housing market:
Ralph DeFranco, Chief Economist, Arch Capital Services Inc.

“It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”
Liu-Down, Genworth Chief Economist

“My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”
Fitch Report

“US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”

Bottom Line

Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market.

Looking to Buy, Sell, or Invest? Contact:

David Demangos - Keller Williams Realty
Cell: 858.232.8410 | Realtor® BRE# 01905183
www.AwesomeSanDiegoRealEstate.com
Our Team Goes to Extremes to Fulfill Your Real Estate Dreams!

San Diego Real Estate Expert | Global Property Specialist
Certified Luxury Marketing Specialist | CLHMS Million Dollar Guild Agent
Green Specialist | Certified International Property Specialist
2016 & 2017 Recognition of Excellence Award Winner SDAR

Real Estate and Money-Wise Kids

Kids are never too young to learn the skills of saving, budgeting, and other basics for becoming a money-wise individual.

In fact, a recent survey conducted by T. Rowe Price found that 60 percent of kids whose parents frequently talk to them about budgeting feel they are smart about money, as opposed to just 34 percent of kids whose parents do not.

Financial experts agree that the sooner parents start imparting key money concepts, the more effective they will be in raising financially responsible adults. While it may seem like an involved topic, it's as simple as starting a conversation.

"There is a clear correlation between talking with kids about financial topics and their habits," said Judith Ward, a senior financial planner with T. Rowe Price. "Parents can invest in their kids by talking to them weekly about money matters."

The survey also found that parents are having more financial conversations with boys rather than girls.

"Boys and girls should have the same opportunities to learn about money matters at home so they can grow into financially savvy adults," Ward says. "By talking to kids of either gender about things like saving for college, parents can help kids get involved and excited about their future."

Is Real Estate Heading in the Right Direction?

In a recent Gallup poll, Americans were asked to rate 24 different business sectors and industries on a five-point scale ranging from "very positive" to "very negative." The poll was first conducted in 2001, and has been used as an indicator of “Americans’ overall attitudes toward each industry”.

For the first time since 2006, Americans had an overall positive view of real estate, giving the industry a 12% positive ranking. So, yes real estate is headed in the right direction!

Americans’ view of the real estate industry worsened from 2003 to the -40% plummet of 2008.  Gallup offers some insight into the reason for decline:

Prices Dropped

"In late 2006, real estate prices in the U.S. began falling rapidly, and continued to drop. Many homeowners saw their home values plummet, likely contributing to real estate's image taking a hard hit.”

Housing Bubble

“The large drops in the positive images of banking and real estate in 2008 and 2009 reflect both industries' close ties to the recession, which was precipitated in large part because of the mortgage-related housing bubble.”

Bottom Line

“Although the image of real estate remains below the average of 24 industries Gallup has tracked, the sharp recovery from previous extreme low points suggests it is heading in the right direction.”

Who do you know looking to buy, sell or invest anywhere in the U.S.? Call:

David Demangos

Global Property Specialist

858.232.8410
David@AwesomeSanDiegoRealEstate.com
www.AwesomeSanDiegoRealEstate.com

Our Team Goes to Extremes to Fulfill Your Real Estate Dreams! 

Why You Should Buy Now Instead of Waiting by C.A.R.

 

David Demangos 

858.232.8410
www.AwesomeSanDiegoRealEstate.com
Our Team goes to Extremes to Fulfill your Real Estate Dreams!
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