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San Diego Real Estate Market Forecast 2018/2019: Prices Will Continue To Go Up But At A Slower Pace

posted by: John & Melissa Steele in News

It seems like the San Diego real estate market is always “hot.” Every year, records are broken and 2018 and 2019 looks no different. Known as America's finest city, San Diego is one of the most desirable places to live in the world. Perfect year-round weather, beautiful beaches, and plenty to see and do barely scratches the surface of reasons why people are flocking to buy up real estate in the area.

The San Diego real estate market has been on a hot streak

This has been the trend for almost the past 10 years and it looks like it isn’t going to stop.

Forecasts for 2018/19 predict that, while sales will continue to slide, prices will continue to modestly increase. Moving towards the new year, our prediction is that the opportunity to buy property as both a place to live and an investment still looks good.

According to The San Diego Union-Tribune, median home prices are expected to increase 4.2 percent in 2019 to around $583,000 (a new record!). A healthy increase. The problem for home prices isn’t that people aren’t interested in moving here, its that the prices are increasing too fast for most people to afford them. This is also a result of low inventory. In the San Diego housing market, affordability is slowing down the price increases which indicates stability in the San Diego economy.

Why is San Diego Real Estate Expensive?

Other than the anecdote about the climate and desirability, there are also structural issues that constrain the market. The 2008 Recession continues to affect the market all these years later. The problem that the 2008 collapse saddled with San Diego (and the country) is the constraint on building. The 2008 Recession collapsed many construction firms, ended work projects, and slowed the growth of the real estate industry. However, just because new housing slows, does not mean the population stops expanding, people stop moving, and families don’t need homes. So, for the past few years, the housing industry (especially in California) has been playing catch-up to demand.

Add to the slowdown in new construction with California’s historic opposition to new housing developments. The San Diego (and California) tradition of empowering local community and neighborhood groups to supply their input in new development projects means that everyone wants new housing (just not in their neighborhood because it could change its “character”). Overcoming these local opposition groups can be expensive and time-consuming (city councils answer to their voters after all). Attempts to streamline the process are almost vociferously opposed by groups. Attempts to build in undeveloped areas are opposed by community and environmental groups who want to preserve the open areas. In short, San Diego is tough to build in.

Buying and Selling Trends in San Diego

You know the old adage that no one moves in the winter? Yes, that is even applicable in Sunny San Diego. The peak season for house sales is in the spring and summer months. That means, if you hunt in the off-season, you might be able to find a gem of a home with fewer competing buyers.

Also, despite the opposition to development, many buyers are looking to buy in San Diego County. While beachfront living is a major reason why people move to San Diego, not everyone can afford housing on the ocean.

Housing sales in El Cajon, Lemon Grove, Chula Vista, and La Mesa continue to grow while the coasts slow down. Inland properties are more affordable, larger, and (if you buy in a smart location) only 15 to 20 minutes from the beach and other choice areas to visit.

San Diego is a paradise and it can be your paradise, too. If you have questions about buying or selling in San Diego, please do not hesitate to reach out to Steele San Diego Homes for assistance. We offer a wide-range of services and viewing options ideal to assist families who are moving in from out of town or out of state.


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Buying or selling a home is among the largest financial decisions a person makes in their lifetime. We are here to ensure that you are confident in your decision. Reach out, and let us show you how we can help!

John and Melissa Steele, San Diego Real Estate Agents

John and Melissa Steele