The 2026 San Diego Market Reset: What Buyers and Sellers Need to Know This Winter

As we step into January 2026, the San Diego real estate conversation has fundamentally changed. If the last few years were defined by "unpredictability," this year is shaping up to be defined by recalibration.

At Alta Tera, we don’t just look at the headlines; we look at the micro-trends affecting our San Diego communities. Here is what the data—and our boots-on-the-ground experience—is telling us about the "New Normal" for the San Diego market in 2026.

1. The End of the "Wait-and-See" Era

For much of 2025, many buyers and sellers were frozen by the "mortgage rate lock-in effect." However, as we enter 2026, mortgage rates have largely stabilized in the low 6% range. While we aren't seeing the 3% rates of the pandemic era, the market has finally accepted this as the new baseline. We are seeing a significant uptick in purchase applications as families decide that their life changes—new jobs, growing families, or downsizing—can no longer be put on hold for a "perfect" rate that may never return.

2. Inventory: A Slow Thaw, Not a Flood

Nationwide, inventory is up, but San Diego remains a unique outlier. Because of our natural geography—sandwiched between the Pacific and the mountains—supply will always be our greatest constraint.

However, we are seeing more active listings than this time last year. This is a "slow thaw" that benefits everyone. For buyers, it means you actually have time to perform due diligence. For sellers, it means you must pivot from "selling a house" to "marketing a lifestyle." In 2026, quality and presentation are the new currency.

3. The Shift from "Explosion" to "Equilibrium"

We’ve moved away from the hyper-competitive frenzy where homes sold in 48 hours with twenty offers. Today, the average San Diego home is spending about 35 to 40 days on the market.

What does this mean for you?

• For Sellers: Pricing strategy is now non-negotiable. Overpricing your home in January 2026 is a tactical error that can lead to your listing becoming "stale." Success today requires meticulous preparation and a clear value proposition.

• For Buyers: You have regained negotiating power. We are seeing more sellers open to contingencies, repairs, and even rate buy-downs. It is a much more rational environment for making a long-term investment.
  

The Alta Tera Perspective

The San Diego market isn't cooling; it’s maturing. We expect modest, sustainable price growth of 3% to 5% throughout the year. This is healthy. It builds equity without the bubble-like anxiety of previous years.

Whether you are looking at a modern condo in UTC or a family estate in Poway, the strategy for 2026 is simple: Focus on the fundamentals. Buy for the lifestyle, hold for the equity, and work with a partner who understands the nuances of our local neighborhoods.

Ready to plan your 2026 move? The first step is understanding exactly where you stand in today's market. [Click here to schedule an free consultation with our team.]