Are San Diego Home Prices Dropping? October 2026 Update

by Mance Rieder

Are San Diego home prices dropping? What September's numbers say

Quick answer: Are San Diego home prices dropping now that mortgage rates are over 7%?

Not across the board. In September 2026, the median San Diego County list price was $888,450, down 6.3% from a year earlier, and 20.4% of listings had a price cut, per Realtor.com. But homes that sold in August still closed at a median $961,781, up 5.7% year over year, per Redfin.

Key takeaways

Asking prices are softer, and about 1 in 5 San Diego listings has a price cut.
Homes that actually sell are still closing near list price, and above last year's prices.
San Diego inventory is slightly lower than a year ago, while the national count is up.

If you've seen this week's headlines about price cuts and 7% mortgage rates, you're probably wondering whether San Diego home prices are finally coming down. The honest answer is: it depends on which number you're looking at.

What happened in the housing market this week?

Two reports set the tone. On September 30, Realtor.com's September housing report found that 20.8% of active listings nationwide had a price reduction, the highest September share since 2018. Pending sales were down 4.1% from a year earlier.

The next day, Freddie Mac reported that the 30-year fixed averaged 7.28% for the week of October 1, up from 7.03% the week before and 6.34% a year ago. If you're shopping, Friday's post on what buyers can still control when rates jump walks through the payment side.

So nationally, it's more homes, more price cuts, and fewer buyers signing contracts. San Diego County looks a little different.

Are San Diego home prices actually falling?

Asking prices are. In September, the median list price in the San Diego metro (which covers all of San Diego County) was $888,450, down 6.3% from a year earlier, according to Realtor.com. The median list price per square foot was down 3.4%, so part of the drop is a shift toward smaller homes on the market, not only lower prices on the same homes.

Sale prices tell a different story. The San Diego County median sale price was $961,781 in August, up 5.7% from a year earlier, and homes sold at a median 99.2% of list price, according to Redfin.

What does that gap mean? Asking prices have softened, but the homes that are priced right are still selling for close to what they ask. If you want to tell the two apart when you're touring, here's how to know if a San Diego home is overpriced.

How many San Diego sellers are cutting their price?

About 1 in 5. In September, 20.4% of San Diego metro listings had a price reduction, up 0.6 percentage points from a year earlier (Realtor.com). That's close to the national share, but the local supply picture isn't.

Nationally, active listings were up 5.4% from a year earlier. In San Diego County, they were down 1.5%, and new listings were essentially flat (down 0.1%). Realtor.com also found homes here spent 3 fewer days on the market than a year ago. Redfin put the August median at 28 days, down 13 days year over year (Redfin).

In plain English: San Diego still doesn't have a lot of homes for sale. The price cuts here look more like sellers adjusting their asking prices than a flood of new supply. If you're curious why time on market matters so much, this post on days on market explains it.

What does this mean if you're buying or selling?

If you're buying: You have more room to negotiate on homes that have been sitting or have already cut their price. Well-priced homes in good condition still move quickly, so don't assume every seller will come down. Run your own payment at today's rates in our mortgage calculator before you write an offer.

If you're selling: Your first few weeks on the market get the most attention. With about 1 in 5 listings cutting price, an overpriced home stands out for the wrong reason. Pricing it right from day one, based on what homes like yours actually sold for, is how you avoid a price cut later.

If you're just watching: A list price headline doesn't tell you what your home is worth. Check what's actually selling near you with a free home value estimate.

Bottom line

San Diego asking prices are softer and more sellers are cutting, but homes that sell are still closing near list price and above last year's levels. Supply is still tight here, which is why the local market isn't following the national headlines step for step.

Want to know what this means for your home or your search? Call or text me at (858) 295-0556, or book a quick call at https://calendly.com/mance-riederhomes/strategycall.

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Mance Rieder | Broker Associate, DRE #02050930 | Rieder Homes Group | REAL Broker, LLC