San Diego home sales fell 14% in September. In the same month, the median price of a single-family home climbed 5.8% to $1,079,000. Fewer sales and higher prices. On paper, that shouldn't happen.
So which number tells the truth about this market? Both do. Once you see what has been missing from San Diego for almost a year, the two numbers fit together. And there's a third number, one under one percent, that tells you how long this lasts.
Fewer Sales, Higher Prices
Here's the September picture from the San Diego MLS, compared with September 2025. "Detached" means single-family homes. The median is the midpoint of every sale, so half the homes sold for more and half sold for less.
That detached median sits $59,000 above last year. No September in the report comes close, and prices have now beaten the prior year four months running. Prices did ease off their summer high, which is what fall usually brings.
The Reason Is Supply
I don't think higher mortgage rates caused this drop. Not yet. The 30-year rate only pushed past 7% in the last days of September. A rate move needs at least thirty days to reach these numbers, and more often forty-five to sixty.
The drop comes from supply. Active inventory counts every home still for sale on the last day of the month. For single-family homes, that count has trailed the prior year eleven months in a row. Buyers don't buy homes that never hit the market. When the shelf is thin, fewer deals close, and the homes that do sell keep their value.
The Proof Prices Held
Days on market is the time from the day a home lists to the day the seller accepts an offer. A market losing its buyers shows it fast. Listings sit, and sellers start cutting. The opposite happened.
Detached homes went under contract four days faster than last September, and that's five straight months of faster sales. Sellers also collected more of their original asking price. Picture a $1.1 million listing in Clairemont. Going from 97.0% to 97.7% of asking works out to about $7,700 more in sale price, before costs. Fewer buyers are out there, but they're competing for even fewer homes.
The Number That Decides How Long This Lasts
Detached new listings came in at 1,774 in September, up 0.7% from last year. That looks like nothing. But it ended a ten-month run of year-over-year declines, with May down 19.5% and June down 16.5% during the busiest part of the season. Detached sellers hadn't outpaced the prior year in eleven months.
At the same time, buyers pulled back. Detached pending sales, the homes that went into escrow, fell 16.8% to 1,082. A year ago, detached pending sales equaled about 3 in 4 new listings. This September the ratio was about 3 in 5. These are monthly totals, not a count of which newly listed homes entered escrow that same month.
The inventory chart shows the result. Detached homes for sale are still below last year, but the gap peaked in June and has narrowed every month since.
At 2.4 months of supply, single-family homes remain a seller's market. In this MLS report, months of supply divides active inventory by average monthly pending sales over the last twelve months. Four to six months is balanced.
What It All Adds Up To
September was the month sellers came back and buyers stepped back. Prices held because a year of thin detached inventory left buyers with few choices. And the jump past 7% hasn't hit the numbers yet. Expect that over the next thirty to sixty days.
That's how a market starts to rebalance. Supply builds while demand cools. No crash required. My October checklist is short. If pendings stay soft and new listings keep rising, detached inventory looks set to flip positive versus last year. After that, expect homes to take longer to sell, and then pressure on prices.
Watch the Full Video
This post covers why San Diego prices rose while sales fell. The full video goes further. I break down why the condo and townhome market has gone three years without price growth, how San Diego's pending sales fell roughly eight times harder than the national decline, where I see the real opportunity for buyers right now, and why the right single-family home is worth fighting for in a market this tight.
Watch the full video on YouTube
If you have any questions or concerns, don't hesitate to reach out.
As always, I'm Karl Kyler, your San Diego Realtor.
Karl Kyler · Karl San Diego
eXp Realty of Southern California, Inc.
KarlSanDiego.com · 619-829-2908
DRE #01439839