San Diego remains as one of the hottest real estate markets in Southern California.
Its coastal setting, gorgeous weather, robust job market, and esteemed universities continue to attract new residents from all over the United States. It’s easy to see why the city and its housing market have a bright outlook for 2023.
Home Prices
In May 2023, the median listing home price was $1 million, or $710 per square foot – up 6.4% year-over-year, according to data from Realtor. Most homes sold for approximately the asking price with a sale-to-list price ratio of 100.09% and a median home sale price of $908,000.
Home prices in the San Diego-Carlsbad metro area increased between mid-2020 and mid-2022 as mortgage rates plummeted to historic lows. Though the local housing market has leveled out since then, home prices remain high.
Residents can expect to spend 123% more for housing in San Diego compared to the national average, according to data. However, the overall cost of living in San Diego is still lower compared to other major urban areas in the US. For instance, the cost of housing is 9% higher in the Los Angeles-New Beach area and 129% higher in Manhattan as of June 2023.
Known as “America’s Finest City”, San Diego remains desirable due to its scenic coastline and relaxed lifestyle. Buyers are willing to pay a premium to secure the finest properties in the city. Homes near the coastline have retained more value due to their unique and sought-after location. However, buyers and investors may still find real estate deals further inland to the north, east and south.
Housing supply and demand
There is steady demand for San Diego real estate due to several factors, such as population growth, a strong local economy, and a high quality of life. According to Realtor, San Diego was a seller’s market in May 2023 with 1,994 homes for sale, meaning there were more buyers than available homes for sale.
Although more sellers entered the market to leverage rising home values in 2022, inventory remained low. Supply dwindled to 1.85 in December 2022 before edging higher to 1.9 months in January 2023, according to real estate data from US News & World Report. Though supply increased further in January 2023, the level of supply was just a fraction of housing supply for the entire nation, which was 3.21 months in January.
Construction permits
In early 2023, the U.S.NewsHousing Market Index anticipated that nearly 1,500 single-home permits would be issued from February through June. In addition, 1,775 permits had been approved for multifamily construction in the San Diego metro area. With more real estate projects moving forward, developers and builders will be able to add new supply to the housing market
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