The San Diego Housing Market Is Looking Like A Typical Holiday Market!

San Diego Real Estate Market Round-Up Nov 28 – Dec 4

Last week, I began a deeper dive into the rapidly shifting macro trends and how they may impact our local real estate market in 2026. I lay out where my head is at so far in this week’s update.

Weekly Snapshot (Nov 28 – Dec 4)

(Source: SDAR & Mortgage News Daily)

We’ve seen the weekly average for expired and canceled listings rise to over 240 since September. Prior to September the average for the year hovered around 200. With fewer than 500 new listings hitting the market each week, roughly half of new supply is being offset by stale listings coming off-market.

The result: active inventory fell by another 294 last week. But those sellers aren’t gone — shadow inventory continues to build, creating an ongoing headwind for values.

Tailwinds (values up): Rates lower, active inventory lower, stock market higher.

Headwinds (values down): Job security down, income growth down, shadow inventory growing, affordability out of sync, consumer sentiment low.

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Why Q1 Often Rebounds

Seasonality matters. Every year, we see price movement soften in November and December as buyers pull back and sellers wrap up life before the holidays. By mid-January, activity returns, motivated buyers step back in, and values typically recover 1–2%. Given the current inventory compression, that rebound could be sharper if rates cooperate.

Inventory vs. Demand Matters

Inventory keeps trending down, not because buyer demand is exploding — but because sellers are pulling listings or delaying plans. When active inventory drops below ~6000 units in San Diego County, we tend to see upward pressure on prices even with muted demand. Shadow inventory is the wildcard: those sellers will return eventually, and when they do, they’ll influence the balance of power.

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Mortgage Rates: The Wildcard

Rates ended the week at 6.27% before bouncing back to 6.36% Monday. We’ve been trapped in a tight 20 bps range since August. Small bumps don’t move the needle — we need a break below 6% to activate a new wave of buyers, or a spike above 6.5% to noticeably cool demand.

PCE inflation cooled, but the data lagged so much the market mostly shrugged. Core inflation declining for the first time since April was a bright spot. ISM Manufacturing shows 9 straight months of contraction — normally good for rates, but markets are holding until the Fed meeting.

How’s Wesley Feeling About The Market Right Now?

The market tried to stay under 6.25% but bounced back into the 6.25%–6.50% zone. My view: the non-AI part of the economy is slowing. I expect we’ll break below 6% and hold that level within the next 6 months.

3-month outlook (Jan 2026): Typical seasonal dip through Dec, recovery begins in Jan — I expect values 1–2% below October by late January.

6-month outlook (Apr 2026): More sellers forced to list. Expect rates below 6% by April. Potential policy moves from the administration could stimulate homebuying. My call: +1.5%–3% gains from January levels.

12-month outlook (Oct 2026): Home values peak in May. Expect values 2–4% lower year over year by October. Affordability and job displacement pressures remain major factors.

Most Frequently Answered San Diego Home Seller Questions

Macro & Local Notes

Layoff announcements now exceed 1.1 million this year — the highest since 2020. San Diego was among more than half of U.S. cities with falling home prices in September. Markets are waiting on this week’s Fed meeting; tone will matter more than the cut.

Buyer & Seller Strategy Corner

Agents: Ready, willing, able buyers > average sellers — but nothing beats a motivated, realistic seller.

Flippers: Be conservative. Avoid weird floor plans. Budget for longer holds & buyer credits.

Long-term investors: Don’t count on real appreciation above inflation. Buy for cash-flow or tax advantages.

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Final Thoughts

Inventory continues to fall, shadow inventory is building, and rates remain range-bound. Seasonal softness will likely give way to a Q1 rebound, with rates being the catalyst that determines how strong that rebound is. I’ll have a full breakdown of November numbers next week.