San Diego Buyers Have the Upper Hand Right Now – Why That Window Won’t Last

Written by:

Alejandra Rodriguez

Date:

01 Apr 2026

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After years of bidding wars and rapidly rising prices, San Diego’s real estate market has entered a period that favors buyers. For the first time since the pandemic boom, buyers have more negotiating power, homes are lingering longer on the market, and sellers are more willing to make concessions. But this window of opportunity is expected to close by late summer, as falling interest rates are likely to reignite competition.

Why San Diego’s Market Feels Different Now

The intense pressure that defined the past few years has eased. Buyers are no longer racing to outbid a dozen competitors, and sellers can no longer count on immediate offers over asking price. Instead, the market has shifted to a slower, more deliberate pace.

John Paul Teague, partner at Musick, Peeler & Garrett LLP in San Diego, has watched these shifts unfold over decades of real estate law practice. He notes that buyers now have more time to make decisions and greater leverage at the negotiating table. “This is a buyer’s market, or will be in the next few months here,” Teague says. He believes those who act soon will secure better deals than those who wait for rates to drop.

On the ground, the change is clear: homes are staying on the market longer, and buyers can tour multiple properties before making an offer. Sellers who were hoping for bidding wars are adjusting to a new reality, often agreeing to price reductions or covering closing costs to get deals done.

What’s Causing the Shift

Two main forces are shaping the current market: elevated interest rates and changing seller expectations.

Higher mortgage rates have sidelined many buyers, reducing competition for available homes. Those who are still active in the market face less pressure to make quick decisions or waive contingencies. This has opened the door for more negotiations around price, repairs, and closing terms.

At the same time, sellers have recognized that the days of easy sales are over. Many are more willing to compromise on price or offer incentives, such as covering closing costs or agreeing to repairs, to attract serious buyers.

Teague points out that this dynamic is temporary. He expects to see “greater price pressure with more financing available and lower interest rates” later this year. That means the current buyer-friendly environment is likely to end once rates begin to fall.

Why the Advantage Won’t Last

The Federal Reserve is widely expected to cut interest rates in the coming months, possibly as soon as May or June. When that happens, more buyers will return to the market, increasing competition for available homes.

Lower rates will make monthly payments more affordable, drawing in buyers who have been waiting on the sidelines. As more people compete for the same properties, sellers will regain leverage, and buyers will lose the negotiating power they have now.

Waiting for rates to drop may seem like a smart move, but Teague warns it could backfire. By the time financing becomes cheaper, buyers will face more competition and higher prices. The deals available today may not be there once the market heats up again.

How Buyers Can Take Advantage Now

For buyers who are pre-approved and ready to purchase, the current market offers rare opportunities. Sellers are open to negotiation, and buyers can take their time touring homes and weighing options.

Now is the time to ask for concessions, such as closing cost credits, repairs, or price adjustments. Sellers are more likely to agree to these terms now than later in the year, when demand is expected to rise.

Buyers considering tax-advantaged strategies, like a 1031 exchange, should consult a professional soon. Many of the favorable deal structures available in today’s market may disappear once competition increases and sellers regain the upper hand.

What Sellers Should Know

Sellers need to adjust their expectations to match the current market. The bidding wars and rapid sales of 2021 are no longer the norm. Pricing a home realistically from the outset is critical — overpriced listings are likely to sit, and properties that linger on the market often end up selling for less.

Offering incentives, such as covering closing costs or providing a home warranty, can make a listing stand out when buyers have more choices. Small gestures can tip the scales in a buyer’s favor and help ensure a successful sale.

The Takeaways

San Diego’s real estate market is offering buyers more leverage than at any point in recent years, but this window is expected to close quickly. Anticipated interest rate cuts later this year will likely bring more buyers back into the market, increase competition, and reduce opportunities for negotiation. Teague summarizes the urgency: “If you’ve got the extra capital, then people are really going to be kicking themselves if they’re not aggressive with their acquisitions in the near term.”

For buyers, the next few months represent a chance to negotiate from a position of strength, secure favorable terms, and avoid bidding wars. For sellers, realistic pricing and flexibility are essential to closing deals before the market shifts again.

About the Expert: John Teague is a partner at Musick, Peeler & Garrett LLP, where he focuses on commercial and residential real estate transactions, corporate deals, and complex property negotiations across California and beyond.

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.