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Buying a House in San Diego? Five Things to Know about the 2018 San Diego Housing Market


 Photo Credit: Flickr: Wendy Cutler 

When you’re thinking about buying a house, it’s important to understand some basic real estate market trends, both in the country as a whole and especially in the area where you’re hoping to buy. So if you’re planning to buy a house in San Diego in 2018, here are a few things you should know:

1. Home Price Trends

Home prices in California are predicted to climb in 2018, according to a report from the California Association of Realtors. The group forecast that median home prices in California will rise by 4.2 percent to reach $561,000; however, this is less than the previously forecast increase of 7.2 percent. While these numbers are not specific to San Diego, the report suggests that San Diego will see a similar rise in house prices in 2018 because Southern California represents the state’s largest housing market.

Economists are also predicting continued economic growth in San Diego through 2018, particularly in the military, medical, tourism, and biotech sectors.

What remains unclear, however, is how the new tax legislation will affect San Diego’s housing market. Under the new tax bill, taxpayers with existing mortgages can still deduct their mortgage interest on up to $1 million of mortgage debt for a first and a second home. For new homebuyers, however, the mortgage interest deduction will be capped at $750,000. This could cause home values to drop in the future, but could also lead to a slowdown in home construction, as new homes will be less profitable for builders.

What we know:

San Diego home values are cyclical. Home values rise for a period of time and they decline for a period of time. And San Diego home values, on the whole, have been rising since 2010-2011. So they have been rising for about 7-8 years. And we know that most cycles historically have lasted for about 5-10 years. We are not at the bottom of a cycle (that was 2010-2011). Home values may continue to rise for a few more years, but at some point they will come back down again. I recommend that you thoroughly evaluate your long-term plan, so you don’t potentially get caught being forced to sell in few years in a downward cycle. The key is to outlast the cycle, or else you could lose a lot of money. Hiring an experienced buyer’s broker who is truly looking out for your interests can help you avoid costly pitfalls and help you make a thoughtful plan.

2. Home Price and Economic Trends By Neighborhood

While San Diego housing costs generally follow the real estate market trends seen in California as a whole, there is still some variation among neighborhoods and towns within San Diego County and North County. The most expensive areas tend to be Encinitas, Carmel Valley, Solana Beach, Coronado, Del Mar, Rancho Santa Fe, and La Jolla. Properties in these areas can reach well into the seven figures. Some areas of San Diego County are experiencing strong seller’s markets, while other areas are experiencing neutral markets or even buyer’s markets. It’s very important to understand the market dynamics in the specific area (and type of home) that you’re looking in. The most experienced and most active buyer’s broker can offer you the best advice when it comes to market trends. (Read more about the difference between hot and cold markets.)

3. Supply and Demand

Renters in San Diego on average pay more than 40 percent of their income on rent, making purchasing a house an attractive goal for many people. However, a combination of high housing costs and low inventory in many areas throughout San Diego led to an overall decline in home sales in 2017, according to the Great San Diego Association of REALTORS®. Between January 2017 and December 2017, pending sales were down by 2.6 percent overall, although high-end homes (in the $1-1.25 million range) saw an 18-percent increase in sales.

In addition, inventory levels dropped by 24.5 percent in 2017. The Greater San Diego Association of REALTORS estimates that as of December, there was a 1.1 month supply of condos and townhomes and a 1.4 month supply of single-family homes.

What does this mean for buyers? Competition will be stiff for many homes in many neighborhoods, so you may need to be patient while you look for the perfect home - and be prepared to act fast when you find it. And know this, the reputation and abilities of your buyer’s broker can be one of your greatest tools for making your offer stand out in a multiple-offer situation. An exceptional buyer’s broker will give you the best opportunity to get the home you really want.

4. Mortgage Interest Rates

After remaining steady, and at a fairly low rate, since 2011, mortgage interest rates are starting to creep up again. However, so far the jump has not been significant, and rates are still well below the more normal range of 5.5 percent. If interest rates continue to rise, it could impact what kinds of homes people can afford; a continued rise in interest rates could end up driving home prices lower in the coming years.

5. There are a lot of considerations when you’re buying a home in San Diego, so the most important tip I can give you is to find a team that you trust. If you have questions about buying a home in San Diego in 2018, contact me to set up a buyer’s strategy session!

Also Read: 3 Tips for Buying a Home in San Diego in 2018

Also Read: When Is the Right Time to Buy a Home in San Diego?


Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage.

Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.

If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. More about Justin Gramm on . Call Justin at (858) 437-2662 or E-mail.

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Justin Gramm, Broker
Globella Buyers Realty
Ph: 858.437.2662  -  Fax: 858-228-9801
4315 Corinth Street
San Diego, CA 92115
 CA BRE# 01714813


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Globella's Real Estate Blog "For San Diego Home Buyers":

Real Estate Blog for San Diego Home Buyers | Solana Beach Real Estate Buyers Agent - 92075 | San Diego Real Estate Market Statistics and Trends 2nd Quarter 2011 | Cardiff Real Estate Buyers Agent - 92007 | Encinitas Real Estate Buyers Agent - 92024 | Coronado Island Real Estate Buyers Agent - 92118 | Point Loma Real Estate Buyers Agent - 92106 | Talmadge Real Estate Buyers Agent - 92115 | Clairemont Real Estate Buyers Agent - 92117 | Poway Real Estate Buyers Agent - 92064 | Carlsbad Real Estate Buyers Agent | Talmadge Real Estate Buyers Agent - 92115 | Clairemont Real Estate Buyers Agent - 92117 | Poway Real Estate Buyers Agent - 92064 | Carlsbad Real Estate Buyers Agent