2025 San Diego Housing Market: Sellers Think It’s 2021, Buyers Think It’s 2008

The 2025 San Diego housing market feels like a tale of two decades. On one side, sellers are living in a 2021 fantasy, pricing homes like it’s still the pandemic-fueled boom. On the other, buyers are channeling 2008 energy, expecting falling prices and deep discounts. The result? A tense, confusing market where both sides are waiting for the other to blink.

Sellers Still Think It's 2021

In 2021, San Diego homes flew off the market in a matter of hours. That mindset is still alive in 2025, with sellers listing their homes at sky-high prices, expecting bidding wars and multiple cash offers.

• Listings are hitting the market with sky-high asking prices.

• Homes are sitting longer than expected.

• Sellers remain reluctant to drop prices, convinced their property is special.

But today’s buyers aren’t biting. Homes linger on the market, showings are sparse, and reality is creeping in—but many sellers aren’t lowering prices just yet.

Many San Diego homeowners missed the peak of the market—or ignored the signs of its softening. Flush with memories of 20+ offers, bidding wars, and no-contingency cash deals, they’re listing homes as if it’s still the height of the frenzy. Prices are high, expectations even higher. It’s not uncommon to see listings sitting for weeks or even months, with price tags reflecting 2021 comparables instead of current conditions.

Open houses are still being staged with champagne dreams, but the crowds have thinned. Sellers are often slow to adjust, clinging to Zillow zestimates and news from three years ago, convinced that the right buyer—read: desperate and overpaying—is just around the corner.

Buyers Are Stuck in 2008

Buyers today are hesitant—scarred by memories of the 2008 crash. Every price drop feels like the start of something bigger, and social media fuels that anxiety. The days of blind bidding are over. Offers now come with inspections, appraisal contingencies, and more negotiation than we've seen in years.

Buyers are cautious. Interest rates remain elevated compared to the 2020 lows, and affordability has become a serious concern. Many would-be buyers are either priced out or playing the waiting game, hoping for a crash that mirrors the 2008 housing collapse. Every price cut feeds the narrative that things are headed downhill, and buyers are hesitant to act, fearing they'll buy today and see their investment lose value tomorrow.

• They’re watching every price cut like hawks.

• Many are waiting for a crash that may never come.

• Offers come in below asking, full of contingencies.

A growing number are submitting lowball offers, expecting sellers to come down drastically—or simply sitting on the sidelines, convinced the worst is yet to come. There’s a palpable belief among many buyers that they hold the leverage, and that patience will pay off with a bargain.

The Reality: A Standoff Market

The truth? We’re in neither 2021 nor 2008. San Diego's market in 2025 is defined by a lack of alignment. Inventory remains tight, but homes are not flying off the shelves. Prices are softening, but not crashing. Interest rates are high enough to cool demand but not high enough to force a wave of foreclosures. It’s a standoff.

• Inventory is low, but homes aren’t flying off the shelves.

• Prices have softened, but haven’t plummeted.

• Interest rates are elevated, which has cooled demand, but not caused distress.

Sellers aren’t desperate—yet. Many locked in ultra-low rates in previous years, giving them little incentive to sell unless they absolutely have to. Buyers, on the other hand, are still hoping that economic headwinds will trigger a bigger correction. But so far, that crash hasn’t come.

Advice for Navigating This Market

• Sellers: If you truly need to sell, price your home realistically. Look at active competition, not just past sales. Stale listings are increasingly penalized in buyers’ minds.

  • Be realistic—look at active listings and days on market, not just sold prices from 2021.

  • If you need to sell, price competitively from the start.

  • A stale listing can be more damaging than a slightly lower asking price.

    
    

• Buyers: Don’t expect 2008 prices, but do negotiate. Sellers are more open to concessions than they were a few years ago, especially if their home has been sitting.

  • Don’t wait for a crash that may not come.

  • Focus on value, location, and long-term goals.

  • There’s room to negotiate—but the days of fire-sale deals are rare.

    
    

• Agents: This is a market that rewards realism and strategy. Overpromising to sellers or underestimating competition for buyers won’t cut it. The winners will be those who understand the psychology on both sides.

  • Educate your clients—both buyers and sellers need a reality check.

  • Strategy, empathy, and honest data are your biggest tools.

  • Position yourself as the bridge between two very different mindsets.

In summary, the San Diego housing market in 2025 is suffering from a historical identity crisis. Until expectations realign, we’ll continue to see tension—and plenty of opportunity for those who can cut through the noise.