San Diego Home Prices Post 7% Jump Over Last Year, Relief Eludes Buyers

San Diego County’s median home price hit a record $988,000 in the second quarter of 2026, climbing 7% from the same stretch last year and dashing hopes for price relief among spring and summer buyers.

The surge matters acutely now: prospective homeowners are still grappling with some of the highest borrowing costs in over two decades, while inventory remains stubbornly tight. With international instability fanning inflation fears and fueling interest rate jitters, the local market is drifting further from 2022’s pandemic-era volatility and settling into a new affordability crisis.

Low Inventory, High Stakes

In Carmel Valley and Encinitas, open houses on streets like Arroyo Sorrento and Neptune Avenue have drawn crowds each weekend, with buyers bidding over ask in well-ranked school zones. Local agents say the stock of homes in desirable neighborhoods is well below historical averages—just 1,950 active listings across the entire county as of June 30, according to the Greater San Diego Association of Realtors. San Diego Housing Federation staff told The Daily San Diego that applications for subsidized units along El Cajon Boulevard doubled from last spring, underscoring how sharply competition has spiked.

Zillow reports that the median time-on-market for detached homes from April through June was just 23 days, compared with 35 in the same period last year. North Park and Mission Hills, always popular with first-time buyers, now see average sale prices above $1.1 million. Meanwhile, the builder-driven communities in Otay Ranch and Scripps Ranch are commanding premiums on new-construction even before model homes finish interiors.

Numbers Paint a Bracing Picture

According to data from CoreLogic, the average sale price in the county for all residential types rose from $923,000 in Q2 2025 to $988,000 in Q2 2026. Condo buyers haven’t been spared either: median attached prices in Little Italy reached $729,000, up from $663,500 a year ago. Higher-end deals—like a $5.3 million closing on La Jolla’s Coast Boulevard in May—have nudged the overall average higher, while the bottom end has effectively disappeared in most central neighborhoods. County Assessor records also show transfer volumes fell 11% year-over-year, signaling constrained supply rather than waning demand.

Compared with pre-pandemic 2019, a typical San Diego buyer now needs to earn just under $225,000 annually to qualify for a standard 30-year fixed mortgage at an average 6.7% rate. That’s more than double the regional median income, as tracked by SANDAG.

What Buyers and Sellers Should Expect Next

With the Federal Reserve holding rates steady for a third straight quarter and November’s elections looming, most local brokers anticipate continued price resilience—at least through early fall. Builders like Shea Homes and Lennar have flagged ongoing delays due to labor shortages and materials costs, meaning new supply will remain limited. Neighborhood groups in Hillcrest and Barrio Logan have renewed calls for more ADU-friendly zoning, but permits remain bogged down at City Hall.

Buyers hoping for a break may need to adjust timing or target up-and-coming areas, such as Imperial Beach or Grant Hill, where price growth has been milder—though even there, values were up 4% year-on-year according to SDAR’s June survey. Veterans and first-time buyers are encouraged to investigate city-backed down payment programs and to track upcoming HUD auctions in City Heights, where sporadic price dips have emerged recently. In short, San Diego remains a seller’s market, and competitive conditions look set to persist into 2027.