San Diego Real Estate: What the Data Actually Says Right Now
Spring 2026 Market Update | Beach Life Group @ Compass
If you've been waiting for the San Diego housing market to "crash" or "take off," here's the honest answer from the latest John Burns Research & Consulting report: neither is happening. What we have is a market doing something far more nuanced — and if you're buying or selling this year, the details matter.
The Headline: "Normal" Conditions, But That Word Does a Lot of Heavy Lifting
John Burns rates San Diego's current market conditions as Normal — and that rating has held steady since January. Sales pace this spring has trailed the typical seasonal surge, but limited new home supply is keeping builders' pricing power intact and competition alive. Buyer qualification remains the #1 friction point, not lack of demand.
Translation: people want to be here. They just can't always pencil it out.
Prices Are Holding — Barely
The median existing home price in San Diego sits at $1,000,000 as of February 2026 — flat year-over-year. That's not a crash. That's not a boom. It's a market that ran hard, paused, and is now catching its breath.
The Burns Home Value Index, which measures true market-wide appreciation across all homes (not just what sold), shows +0.2% YOY — recovering from a stretch of modest negative growth through mid-2025. The forecast calls for a slight dip of -0.7% by year-end 2026, then a return to positive appreciation in 2027 (+1.9%) and building from there.
The long-term story for San Diego homeowners remains intact.
Inventory Is Rising — But Keep It in Context
Resale listings hit 4,586 in March 2026 — up 5.4% from a year ago. That sounds significant until you remember listings were up 67% year-over-year just 12 months prior. The pace of inventory growth is slowing dramatically.
Months of supply sits at 2.4 — still a seller's market by any traditional measure (6 months is considered balanced). About 34% of homes are still selling above list price, slightly above the historical average of 32%. Days on market is 35 days, just a hair above the 30-day historical average.
This is not a buyer's market. Not yet.
The Affordability Problem Isn't Going Away
Here's the uncomfortable truth buried in this report: San Diego's housing-cost-to-income ratio is 61% — firmly in "Very Expensive" territory, and well above both the historical norm of 43% and even John Burns' adjusted "new normal" of 49%.
To buy the median-priced home here with 10% down at today's rates, you need a household income north of $223,000. Only about 14% of San Diego households can qualify. That constraint is real, and it's the primary cap on price appreciation going forward.
The good news? Affordability is actually improving. Monthly payments on entry-level homes are down about 6% year-over-year as rates have eased slightly, and income growth continues. The forecast sees the housing-cost-to-income ratio dropping to around 57% by year-end — slow progress, but progress.
What About the Bigger Picture?
A few things worth knowing:
Employment is growing slowly. San Diego added about 5,400 jobs year-over-year — a 0.3% growth rate. That's modest, and high-income sectors (finance, tech, professional services) have actually shed jobs over the past two years. The military, healthcare, and government continue to anchor the local economy.
Population is declining slightly. San Diego is currently losing about 8,200 residents per year on net — driven by outmigration to Phoenix, Las Vegas, and Boise. This is a headwind for demand, but it's been a feature of the market for years without triggering a price collapse, largely because new supply remains so constrained.
The Housing Cycle Risk Index is "Very High Risk." This is worth flagging. John Burns has held this rating for San Diego for years, driven primarily by affordability strain. Importantly, the firm notes this is a risk indicator — not a crash predictor. High-risk markets can perform well. San Diego has proven that repeatedly.
The Bottom Line for Buyers and Sellers
If you're selling: You're not in a frenzy market, but you're also not in distress territory. Priced correctly, well-presented homes in North County coastal are still moving. The window of softer conditions appears to be narrowing as inventory growth moderates.
If you're buying: Rates have eased slightly and monthly payments are improving. Waiting for a "crash" to materialize here has not been a winning strategy historically, and the data doesn't support one now. What matters most right now is your qualification, your timeline, and your neighborhood.
If you're sitting on the sideline watching: The equity picture for long-term owners remains extraordinary. Someone who bought in San Diego in February 2022 — near the top — has roughly $234,000 in equity today between price appreciation and principal paydown.
San Diego isn't cheap and it isn't simple. But it remains one of the most structurally supply-constrained, high-demand coastal markets in the country. That's not hype — that's what the data shows.
Questions about what this means for your specific situation in Encinitas, Carlsbad, Leucadia, or Solana Beach? Let's talk.
Data source: John Burns Research & Consulting, San Diego Metro Analysis & Forecast, April 2026. Projections as of February 2026.
