What Happened in San Diego Real Estate in 2024?
San Diego’s real estate market in 2024? Let’s just say, it’s been anything but predictable. From fluctuating mortgage rates to inventory shortages, the year has kept everyone—buyers, sellers, and agents alike—on their toes.
Whether you’re curious about rising home prices or how the latest market trends could affect your next move, San Diego Castles Realty has rounded up the top four factors that shaped our market. Let’s dive into what made this year so dynamic for San Diego real estate and what it means for the road ahead.
One of the most significant trends this year has been the ever-evolving interest rates. Mortgage rates remained elevated for much of the year, making borrowing more expensive for homebuyers. For example, the 30-year fixed mortgage rate fluctuated between 6.5% and 7.2%, according to Freddie Mac, a considerable jump from pre-pandemic lows.
This rise in rates had a direct impact on monthly payments, with buyers facing higher costs to finance their homes. These elevated rates discouraged some potential buyers, cooling demand and contributing to slower market activity compared to recent years.
Even the beginning of 2024’s fourth quarter saw some yo-yo interest rates. However, experts predict that while rates may fluctuate in the near term, they are expected to gradually decrease over the next year, providing some relief for buyers looking to enter the market.
Low inventory levels have been a persistent issue in 2024, which further fueled competition among buyers. However, a late-year increase in listings brought some relief. By September 2024, inventory levels surged by over 20% compared to the previous month, thanks in part to price drops and seasonal shifts in the housing market.
While this inventory boost has provided buyers with more options, the overall shortage of available homes continues to drive up prices in many areas, keeping the market competitive despite the rise in listings.
Affordability has been a key concern throughout 2024, driven by the combination of higher interest rates and rising home prices. According to a report by Bankrate, housing affordability hit its lowest point in a decade this past year.
With home prices still climbing in many markets, the median U.S. homebuyer was spending more than 30% of their income on housing, exceeding the typical affordability threshold. This has made it harder for first-time buyers to enter the market and has widened the gap between potential homeowners and those being priced out. However, we expect to see these difficulties ease slightly with lowering interest rates.
Of course, one of the most noteworthy legal developments this year has been the National Association of Realtors (NAR) lawsuit—which resulted in a $2 billion settlement. The lawsuit targeted buyer-broker commissions and has prompted changes in how real estate commissions are structured.
As a result, it’s crucial for buyers to have a conversation with their agents to discuss negotiating commissions with the seller—or even wrapping it up into their financing package. This legal shift is expected to have a lasting impact on the industry, potentially reducing transaction costs for homebuyers in the years to come.
In 2024, the San Diego real estate market experienced some notable shifts driven by rising interest rates, limited inventory, and continued high demand. With 30-year fixed mortgage rates averaging around 7%, affordability became a significant challenge for buyers, particularly in such a high-cost area.
Inventory remained tight for most of the year, which led to competitive bidding on available homes and quick turnover. Toward the year’s end, new developments and condo projects offered a bit of relief, but the overall market remained competitive—particularly for luxury properties.
However, there is still some significant buyer appeal in San Diego. Just last year alone, we saw a year-over-year home price increase of approximately 6.5%, proving there are plenty of San Diego homeowners currently sitting on a treasure chest of equity.
Overall, this year’s real estate market has been shaped by some significant trends. From rising mortgage rates, fluctuating inventory levels, and even nationwide legal changes—you never know what to expect when it comes to the real estate market.
These factors have combined to create a market that is more complex and competitive than ever before. So as we move into 2025, it’s important to work with a real estate expert who can adapt to the changes of the market and guide you toward real estate success. San Diego Castles Realty takes pride in being your market experts, and we would be happy to set you on the path to real estate success in 2025.
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Let’s dive into what made this year so dynamic for San Diego real estate and what it means for the road ahead.
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