Buying or Selling in San Diego in 2026: What the Market Really Looks Like

Written by:

Steve Marcinuk

Date:

28 Apr 2026

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According to Thomas Nelson, a REALTOR® with Big Block Team at LPT Realty who has been active in the San Diego residential market since 2003 (having first obtained his license in the San Francisco Bay Area in 1999), San Diego has long played by its own rules — anchored by nine military bases, three major universities, and seven distinct economic sectors — but as 2026 unfolds, the region faces mounting pressure from contracting insurance coverage, aging housing stock, and buyers who are increasingly unwilling to compromise on condition or price.

San Diego’s Many Mini Markets

San Diego is not one market; it is many. Nelson challenges anyone who asks for a simple read on conditions. “When they ask me how the market is, I always ask them, which one? Houses, condos, manufactured homes? Are you talking about La Jolla, downtown Chula Vista, or Carlsbad?” Two of his current listings sit in the same zip code: one drew seven offers within five days, while the other has lingered for over two months, fielding only lowball offers. Condition, pricing, and buyer confidence are what set them apart.

The market also splits along behavioral lines. A share of buyers and sellers react to outside events — stock market swings, geopolitical news, rate changes — while others move forward regardless, driven purely by life circumstances. That divide runs through nearly every transaction Nelson handles today.

Buyers Want Move-In Ready Now

Rising inventory has given buyers more negotiating leverage, but they are using it with narrower expectations. Today’s buyers are far less willing to take on properties that need work. Nelson attributes this to a broader cultural demand for immediacy. “If Amazon can drop it off two hours after you ordered it, and Uber Eats drops off your dinner 20 minutes later, they want the same from their house,” he says.

Most of San Diego’s housing stock is 30 to 50 years old. Well-priced, move-in-ready homes in desirable school districts attract multiple offers, while properties with deferred maintenance sit until sellers recalibrate their pricing. Nelson calls this “castle syndrome” — owners pricing based on personal belief rather than actual condition. Homes priced and presented well move quickly; others wait for sellers to meet buyers where the value actually is.

Insurance Crisis Complicates Every Deal

Several major carriers have stopped writing new homeowner policies in California following mounting wildfire losses. Nelson says even his own insurer told him the carrier would maintain his existing coverage but could not add new properties. “We’re having to go to these cleverly named companies that you never heard of even two or three years ago,” he says — referencing newer entrants that Nelson identified by name, including Bamboo, Lemonade, and Goose Head, which have moved in to fill the gap left by the major carriers exiting the state.

The consequences extend beyond higher premiums. In condo and townhome communities, underinsured buildings are flagged as unwarrantable by lenders, limiting the buyer pool to cash purchasers or those willing to accept non-qualified mortgage products at higher rates. Overdue balcony and stairway inspection requirements affecting many HOA communities add another layer of complexity. “There’s no deal that I’ve closed in the last probably five or six years that I would say was easy,” Nelson says. “They’re all a grind.”

Life Events Override Rate Locks

Nelson acknowledges the rate lock effect is real — homeowners holding sub-3% mortgages have resisted listing to preserve their low rates — but argues that life circumstances consistently prove stronger than financial inertia. “Life eventually said, look, rate or no rate, it’s time to move because something is going on that is causing it,” he says.

Among his sellers, landlords are exiting California’s rental market over regulatory frustration, and a separate wave is leaving the state entirely. Nelson says political dissatisfaction became a stated reason for relocating around 2020 — something he had not encountered in his prior two decades of practice. Destinations include Arizona, the Pacific Northwest, Portugal, Spain, and Mexico, with Baja California drawing expatriates drawn by lower housing and medical costs, all within driving distance of San Diego. Nelson also identifies a grandparent migration pattern — sellers following adult children to more affordable states after family circumstances made staying in California impractical.

Military Buyers Stabilize San Diego

Nelson estimates roughly 60% of his client base is military-connected, a direct reflection of the region’s nine bases and the steady rotation of personnel they generate. Military buyers operate on a fixed reassignment schedule, making them far less subject to the hesitation that affects discretionary civilian buyers. That built-in demand, supported by VA loan financing, sustains transaction volume in parts of the market where civilian activity has slowed — and is one structural reason San Diego absorbs market uncertainty better than many comparable California metros.

Opportunity for the Clear-Eyed

San Diego’s market direction will be shaped by the accumulation of smaller pressures: insurance availability, condo compliance requirements, shifting buyer expectations, and the gradual release of inventory from sellers whose life circumstances have finally outweighed their reluctance to move. Nelson sees opportunity for buyers willing to look past cosmetic issues and for sellers who price honestly from the start.

He also offers a longer perspective for buyers paralyzed by rate anxiety. Taking on a new mortgage, Nelson says, is like dropping a brick into a swimming pool — the water adjusts around the brick, and so do lifestyle and finances over time. In a market as layered as San Diego’s, that kind of clear-eyed pragmatism is not just useful — according to Nelson, it is the only approach that consistently works.

About the Expert: Thomas Nelson is a REALTOR® with Big Block Team at LPT Realty who has been active in the San Diego residential market since 2003, bringing over two decades of hands-on experience to buyers and sellers navigating one of California’s most complex housing markets. He began his real estate career in 1999 in the San Francisco Bay Area, and his deep familiarity with San Diego’s unique economic drivers — from its nine military bases to its three major universities — positions him as a trusted resource for clients in the region.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.