January 2026 - San Diego Real Estate Market Update

As we move into a new year, much has changed on the real estate front in the last 12 months, and the market is showing the impacts of those changes. We have seen a trend toward increased inventory, lower mortgage rates, and stable home prices. 

Finally, after three years of the lowest home sales on record across the U.S., these are the factors that we have needed to emerge to bring the market back to life. This combination of factors is helping to ease the lock-in effect for homeowners with low mortgage rates, allowing them to begin planning for the moves they’ve been hoping to make for a few years now. It’s also helping to improve affordability for homebuyers who have been priced out of the market as mortgage rates hovered in the 7%+ range. 

At 6% vs. 7%, the average homebuyer in San Diego saves over $500/month on their mortgage payment. If these trends continue, conditions should be just right to nurture a balanced market, one where buyers and sellers have roughly equal leverage, homes retain their value (and the homeowners’ record-high equity) while prices remain stable, preventing a situation where affordability becomes more and more challenging for buyers with each passing month. If this scenario prevails, the best homes will sell quickly, and well-priced fixer-uppers will once again become desirable. 

What factors will threaten this return to sanity in the real estate market? The health of the economy, namely, the job market (do buyers have the money to spend), and the treasury bond market (which drives mortgage rates). The economic factors that influence these two market segments are too numerous to list, but rest assured that I will keep my finger on the pulse of the real estate market and the broader economy, and keep you in the loop on any relevant developments.

Most importantly, if you have questions or concerns about your specific situation… CALL ME to help sort through them. That’s why we get up in the morning - not just to sell homes, but to serve our clients.

As always, we will be here to continue to provide you with updates about the housing market and answer any and all of your questions. Feel free to reach out to us anytime.

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