San Diego’s home prices have been growing at a record pace for much of this year, but that momentum has slowed down. According to the latest S&P Case-Shiller Indices report, home prices in the San Diego metro area (which covers all of San Diego County) rose by 7.19% in July. While that’s still a solid increase, other cities like New York (8.8%), Las Vegas (8.2%), and parts of Orange and Los Angeles counties (7.23%) have now surpassed San Diego in terms of price growth.
For the first half of the year, San Diego held the top spot for the fastest home price growth in the country. However, July marks the first time since August 2023 that San Diego didn’t make the top three.
The cooling off isn’t just a San Diego trend—national home prices are also growing at their slowest pace in eight months, although they still hit an all-time high according to the Case-Shiller Index, which has been tracking home sales for 27 years.
Lisa Sturtevant, chief economist at Bright MLS, noted that despite rising mortgage rates, home prices have continued to increase. She pointed out that buyers, eager to get in the market, were competing for limited inventory, leading to bidding wars and offers above asking prices.
As of late July, the average interest rate for a 30-year fixed mortgage was 6.78%, down from May’s high of 7.22%. By early August, it had dropped to 6.18%, signaling some relief for buyers. Yet, the housing market isn’t following traditional patterns, and predictions for the rest of the year remain uncertain.
San Diego’s median resale price for single-family homes in July was $980,000, and the inventory of homes for sale reached a yearly high of 5,260. This was a significant jump from the usual 2,900-3,500 homes for sale in recent years, leading some experts to speculate that increased inventory might cause prices to dip. However, as inventory has started to fall again, around 5,000 homes, competition could pick up once more.
Not all cities are seeing these big price jumps. For instance, Portland saw just a 0.84% increase, and Denver rose 1.3%. Meanwhile, in California, high-end properties are driving much of the growth. According to Brian Luke from S&P Dow Jones Indices, expensive homes in places like San Diego, Los Angeles, and San Francisco are seeing the biggest gains, while more affordable homes are rising faster in markets like Atlanta and Tampa.
So, while San Diego’s housing market isn’t growing at the record-setting pace it was earlier this year, the dynamics are still shifting, and the high-end market continues to thrive.
