Nick Rogers
As we head into the spring of 2025, the San Diego County housing market is showing signs of transformation. We’re seeing a significant uptick in inventory, rising seller competition, and a market adjusting to persistent, high mortgage rates. Here’s a breakdown of what’s happening and what it means for you.
A Surge in Inventory: More Homes, More Choices
The number of homes on the market in San Diego County has climbed to 4,126 as of mid-February—the highest mid-February level since 2020. That’s a whopping 61% increase from last year’s 2,569 listings, translating to 1,557 additional homes for sale. Over just the past two weeks, the active inventory jumped by 208 homes, a 5% rise. Compare this to the pre-COVID 3-year average (2017-2019) of 5,469 homes, and we’re still 33% below that mark—but the gap is closing fast.
Why the surge? Homeowners who’ve been “hunkering down” with low mortgage rates (82% of Californians with mortgages have rates at or below 5%) are finally growing tired of waiting for rates to drop. With rates stuck above 6% since September 2022—and mostly above 7% since July 2023—more sellers are deciding to move forward. In January 2025 alone, 3,471 new sellers entered the market, a 21% increase from January 2024’s 2,745, though still 20% shy of the pre-COVID average.
For buyers, this means more options—an exciting shift after years of limited inventory. For sellers, however, it’s a double-edged sword: more competition.
Seller Competition Heats Up
With more homes flooding the market and demand holding steady, selling a home is becoming a bit like trying to stand out in a crowd—everyone’s vying for the same buyers’ attention. In San Diego County, the Expected Market Time—the number of days it takes to sell all listings at the current buying pace—has risen to 73 days. That’s slower than last year’s 43 days and the pre-COVID average of 55 days, marking the slowest mid-February pace since 2019.
As we approach the Spring Market (March through August), expect this trend to accelerate. Historically, new sellers outpace demand during this period, pushing inventory higher and peaking between July and August. In 2024, the inventory hit 4,844 homes in October—59% above 2023’s peak. If mortgage rates stay elevated, 2025 could follow a similar trajectory, meaning sellers need to price strategically to stand out.
Pro Tip for Sellers: This isn’t the year to “test” the market with an inflated asking price. Work with your realtor to pinpoint your home’s Fair Market Value by analyzing recent comparable sales, factoring in condition, upgrades, and location. Homes priced right are still moving, while overpriced listings are lingering.
Demand Picks Up, But Not Enough to Match Supply
Here’s a bright spot: demand is on the rise. Over the past two weeks, pending sales surged by 234, a 16% increase, bringing the total to 1,701. Despite this boost, it’s still 5% below last year’s 1,788 and a significant 79% below the pre-COVID average of 3,052. With demand growing faster than supply in the short term, the Expected Market Time dropped from 80 to 73 days—a sign of some market momentum.
However, the bigger picture shows demand hasn’t kept pace with the flood of new listings over the past year. This imbalance is why inventory is piling up and market times are stretching. As we head into spring, demand typically peaks, but the sheer volume of new sellers could keep the market tilted in buyers’ favor.
Luxury Market: A Mixed Bag
The luxury segment—homes priced above $2 million (the top 15% of the market)—is showing resilience. Inventory rose 9% to 760 homes, while demand soared 26% to 173 pending sales. This pushed the Expected Market Time for luxury homes down from 153 to 132 days. Break it down further:
$2M-$4M: 104 days (down from 119)
$4M-$6M: 144 days (down from 189)
$6M+: 520 days (down from 544)
Expect the luxury market to heat up over the next four weeks before slowing in the second half of 2025, as is typical.
What’s Ahead for Spring 2025?
As we transition into the Spring Market, inventory will likely climb faster, driven by seasonal trends and more homeowners shaking off rate fatigue. Demand should rise too, but unless it surges dramatically, seller competition will keep intensifying, and market times will lengthen. For buyers, this is a golden opportunity to negotiate and explore a wider selection. For sellers, precision pricing and standout marketing will be key to success.
For Buyers: More choices mean less pressure to bid wildly over asking. Take your time, but act decisively on well-priced homes—they’re still getting snapped up.
For Sellers: Partner with a san diego real estate agent who knows the data and can position your home to shine in a crowded market.
Ready to make your move in San Diego County? Let’s connect to craft a strategy tailored to today’s shifting market. Whether you’re buying, selling, or just curious, I’m here to help you navigate this evolving landscape with confidence.
Data sourced from Reports on Housing by Steven Thomas, February 13, 2025.