SAN DIEGO – San Diego County’s housing market is showing signs of cooling after years of record-setting growth, offering a mixed outlook for buyers, renters, and developers across the region.
New data from Redfin shows the median home price in San Diego County fell to $917,500 in June 2025, marking a 3.3% decline year-over-year. Sales activity also slowed, with 2,019 homes sold, down 1.4% from the same time last year. Homes are sitting longer on the market as well, with the median days on market increasing to 29 days, up from 17 in June 2024.
Real estate analysts attribute the slowdown to higher interest rates, inflation-driven caution, and rising inventory levels. While the market is shifting slightly toward buyers, affordability remains out of reach for many families. Though prices dipped countywide, some neighborhoods like Downtown San Diego saw modest year-over-year gains, indicating uneven trends within the broader slowdown.
Meanwhile, San Diego’s urban core neighborhoods are driving a disproportionate share of the city’s new residential construction. A report from inewsource and KPBS revealed that Downtown, Bankers Hill, Hillcrest, and North Park, areas comprising less than 3% of the city’s land area, accounted for nearly 30% of all new housing permits from 2018 to 2024.
The data reflects a deliberate policy shift toward high-density development near transit corridors and commercial hubs. According to city records, 74% of housing permits issued during that period were for multi-unit buildings, while single-family homes made up just 6%.
City officials believe this type of infill development is necessary to address San Diego’s housing shortage. Councilmember Kent Lee has emphasized that many urban parcels remain underutilized and could support additional housing.
By contrast, several high-demand suburban and coastal communities, such as La Jolla, Rancho Peñasquitos, and Ocean Beach, have seen relatively little development due to zoning restrictions and limited land availability. Critics argue this imbalance hinders equitable growth.
As prices flatten and construction clusters closer to downtown, San Diego County stands at a turning point. Whether urban-focused development can keep pace with demand and make housing accessible to more residents remains a central question shaping the region’s future.
