San Diego Housing Market: This Is What You Need To Know

Another year, another hot season for the San Diego housing market. America’s Finest City has long been home to dreamers, who set out to live their life on the ravishing coastline under infinite sunlight—we have a feeling you might be one of them too. Settle down in a waterfront abode surrounded by top-notch restaurants, ocean vistas, and neighborhoods teeming with history and culture; your forever home awaits. 

Here’s our guide to all things San Diego real estate; let the house hunting begin!

A rundown on the San Diego Real Estate Market

Increasingly growing as the new tech hub, San Diego never runs out of surprises. More and more people are moving here recently to find jobs and start businesses, and this, as you might have guessed, creates a cause-and-effect reaction when it comes to the housing market. And while a lot of San Diegans are claiming that the city’s economy is highly reliant on tourism, it’s actually the professional industries that are growing its tax base right now.

So what does this really mean? This means that of all the people visiting San Diego County, a large portion is looking more towards settling rather than just touring. And while income is still catching up with the larger population, housing construction shows no signs of picking up the pace. This results in where we are now—a highly competitive house market. 

San Diego Real Estate Forecast

A Great Time to Sell 

The unprecedented year of 2020 brought along a very tricky housing market with one unexpected perk—a seller’s paradise. This might seem weird, but a lot of experts predicted this phenomenon in the case of early 2021, and lo and behold; it came true. The nationwide economy is expected to take a dip, sure, but the San Diego house prices are expected not to take a value drop. Rather, they say it’s going to rise at just short of four percent and, according to local real estate gurus, many will start house hunting at the end of the year. This would make fall or winter a great time to put your house on the market.

Skyrocketing Rent

An increase in rent has been a trend in the San Diego rental market for a few years now. Renters pay more than 40 percent of their income toward housing in four of the largest nationwide markets, which includes San Diego as well. 

There are two things this could do to single-family purchasing. For one, increasing rent could force people to move elsewhere, in turn making the market a bit less tense. Or, it could swing in the opposite direction with rent becoming so expensive that tenants see it better (both long-term and short-term) to just buy. As for now, however, these predictions will have to remain predictions.

Greener Houses on the Market 

The Golden State has passed new building code regulations that are scheduled to have started in 2021, mandating all new homes to function on renewable energy. They are all said to be ‘net zero ready’, which basically means they generate as much energy or even more energy than they use.

Other building codes mandate that every new single-family home have solar panels installed on the roof. This is great news for homebuyers because these alterations don’t necessarily increase the purchase cost tremendously and they serve a better cause—a greener environment for generations to come. Plus, there are utility companies with generation programs, where you sell your unused energy for profit. In short, not only will you be saving money in energy costs, you might actually even be making money.

More Million Dollar Neighborhoods

San Diego currently has eight one-million-dollar neighborhoods, making the market for those areas piping hot. According to Zillow, 346 of these communities have been built since 2014—the neighborhood earns that title when more than 10 percent of its houses have the value of a million dollars and more. Escondido, Downtown San Diego, Carlsbad, Scripps Ranch, and Jamul are all examples, and the trend is here to stay.

Millennial Homebuyers 

Watch out, San Diego real estate market—millennials are here to stay. With new and higher-paid jobs, millennials are said to be seizing purchases left and right. And as late 2020 left prices at a bit of a flatline, the competitive market (particularly for starter homes) kicked in full gear. If you’re planning on entering the market anytime soon, you may want to start getting your finances together.

What’s the Median House Price in San Diego?

With single-family homes leading the way, experts are predicting a yearly increase of about 25 percent in San Diego’s median home prices. Right now, Zillow estimates that value to be around $802,680, but by this time next year, they say that price tag is going to loom around one million. But before you give up on the idea of buying property in San Diego, remember that these estimations are not set in stone. The market is becoming more unpredictable than ever, so there’s no hard proof evidence that housing is changing prices just now.

How Is the San Diego Rental Market? 

San Diego is a highly diverse city, and if you’re interested in renting, make sure to do your homework. If you want to live close to the beach, the main areas to look at are Ocean Beach, Pacific Beach, Mission Beach, and Imperial Beach—and even these offer vastly different living experiences.

As an area blessed with a long summer season, San Diego’s weather is a big pull for tourists. They typically visit in early spring or late fall, when other parts of the country grow colder. And if you’re entering the San Diego rental market during these periods, keep in mind that beach rentals are going to be high in demand. March to May and August to October feature the highest rental rates in all of the county, especially for tenants who gravitate towards beach and college communities. If you can afford the flexibility, wait until the time slot between November and February to sign a lease.