Looking at families who bought homes in San Diego a long time ago and still hold them, there is one commonality: they have weathered several cycles of price fluctuations. According to Zillow's ZHVI, the average home value in San Diego is $951,200, which is down 1.7 percent from a year ago as of May 31, 2026. Redfin's March data shows that the median sale price in the city is $950,000, a decrease of 1.5 percent compared to a year ago. It is notable that both figures point in a roughly similar direction.

What does this number actually mean? It can be interpreted as a signal that the rapid increase seen in the years following the pandemic has halted and entered a phase of gradual adjustment. However, it is also important to note that the decline is not significant. A 1-2 percent adjustment is more about catching one's breath than a market collapse.

The inventory situation makes the reasons clearer. According to Redfin, the inventory of homes for sale in San Diego County has nearly doubled from its low of about 5,000 in 2023, but it still falls short of the pre-pandemic levels of 10,000 to 12,000. Additionally, inventory in July 2026 showed a trend of decreasing for six consecutive months. The time it takes to close a sale is 27 days as of June, which is actually shorter than the 29 days from a year ago. This indicates a market where listings are being absorbed relatively quickly.

This trend is not unrelated to the lock-in effect. Existing homeowners who secured loans at ultra-low rates of 3-4 percent in 2020-2021 are hesitant to sell in the face of the current 30-year fixed mortgage rate of 6.6 percent (as of July 2026, according to Freddie Mac PMMS), and San Diego is no exception. Since selling would mean giving up a lower interest rate, there is little reason to list their homes now.

Areas with strong school districts, which are of interest to Korean families, remain highly competitive. Areas like Poway, Del Mar, and Carmel Valley are home to top-rated schools according to GreatSchools, leading to a constant influx of inquiries. However, school district boundaries often change at the address level, so it is advisable to verify the assigned school based on the specific address when considering a particular home.

For investors looking for rental income, it is also important to consider rental prices. According to Zumper, the average rent for a one-bedroom in July 2026 is around $2,300, and the overall average rent is $2,750, which is down 2 percent from a year ago. This suggests that many listings have a rent-to-price ratio of less than 1 percent, meaning cash flow could be tight if approached solely from a cap rate perspective. A long-term holding strategy that also accounts for price appreciation seems to be a more realistic choice.

Families relocating from other states should factor in California's unique property tax reassessment method and insurance costs. The property tax is reassessed based on the purchase price, so budgeting based on tax perceptions from their previous state could lead to significant discrepancies.

Investors considering long-term holdings should reassess their leverage levels. A higher proportion of loans increases the burden of monthly payments due to interest rate fluctuations, and even a few months of vacancy can severely impact cash flow. Cap rates typically vary between 4 and 10 percent across different markets, so conservatively estimating net operating income before purchase is a safer approach.

The risk of property tax reassessment is also an often-overlooked aspect. In California, property taxes are reassessed based on the purchase price, leading to a widening tax gap between long-term holders and new buyers. This gap is a reason for choosing long-term ownership, but it is also a variable to consider when planning for future sales or inheritance.

Ultimately, the current San Diego market is neither a place to rush into nor completely withdraw from. Watching for a gradual decrease in interest rates and an increase in inventory can be helpful, while narrowing down desired school districts and budget ranges in advance can aid in practical decision-making. This article does not constitute investment or legal advice, and it is recommended to consult with real estate and tax professionals before making any actual contracts.