Separating Fact From Fiction: What's Really Happening in the San Diego Real Estate Market Right Now

The headlines are pretty dramatic these days. One minute you're reading about mortgage rates plummeting, the next you're seeing posts about a housing crash coming. If you're thinking about buying a home in Coastal North County or anywhere in San Diego, it's easy to feel uncertain. All that noise can shake your confidence in making a move.

Here's the thing: a lot of what you're hearing doesn't match the data. And in real estate, data is what matters.

A recent CNBC study asked homebuyers what they're most worried about. Three concerns came up repeatedly:

Mortgage rates, the number of homes for sale, and home prices.

All valid questions. But most of the stories circulating about these topics? They're based more on misconceptions than facts. Let me break it down.

Misconception #1: Mortgage Rates Are About to Drop Dramatically, So You Should Wait

Social media is full of posts claiming mortgage rates are headed way down, and waiting to buy is the smart play.

The reality: that's not what the forecasts show.

Yes, rates have dipped a bit over the last few weeks. But the consensus from major lenders and economists is that rates will likely settle somewhere in the low 6% range for 2026. That's not a dramatic drop from where they are right now. It's more like a plateau.

More importantly, here's something people overlook: even at today's rates, buying is already more affordable than it was a year ago. Waiting for rates to drop 2 or 3 percentage points is betting on something that might not happen. Meanwhile, you could be building equity and locking in your monthly housing payment today.

U.S. News summed it up well: "Mortgage rates aren't expected to change much over the next several quarters."

If you're in the market, waiting for a dramatic rate drop could cost you the opportunity to buy the right home at the right time.

Misconception #2: Inventory Is Out of Control Because There Are So Many Homes for Sale

The headlines are screaming that inventory is up 8% compared to this time last year. And yes, that's true. But the way it's being reported makes it sound like the market is flooded with homes.

It's not.

Yes, we have more homes for sale than we did a year ago. That's actually a good thing because it gives buyers more options and negotiating power. But here's what the big-picture data shows:

Even with the increase, national inventory is still nearly 14% lower than it was during the normal housing market of 2017 to 2019 (before the pandemic scrambled everything).

Only 9 states nationwide have more inventory today than they did in pre-pandemic times.

In San Diego, we're not one of those areas. Our market remains tight where quality homes still move quickly.

The bottom line: we're not back to "normal" inventory levels yet, and we're definitely nowhere near the oversupply that preceded the 2008 crash. There simply aren't enough homes for sale to trigger the kind of market collapse some people are worried about, especially in San Diego County.

Misconception #3: Home Prices Are About to Crash

This one gets a lot of attention because a handful of metros are seeing slight price declines. And that's being used as evidence that a crash is coming nationwide.

But that's not what the data shows.

Most markets, including here in North County San Diego, are still seeing prices rise. Here's why:

Many homeowners are locked in. People with 2% to 3% mortgage rates from a few years ago aren't selling unless they absolutely have to. That keeps inventory constrained and helps stabilize prices.

Inventory is still below pre-pandemic levels. When there aren't enough homes for sale, you don't get the kind of price declines that trigger a crash.

Sellers still have options. Even in markets with more inventory, many sellers are choosing to list at a lower price, or pull their homes off the market entirely, rather than get aggressive with price cuts.

And here's the thing that matters most: even in the few markets experiencing mild price declines, the drops are nowhere near wiping out the gains homes have made in the last five years. That's not a crash. That's prices taking a breath after a few record-breaking years.

In Coastal North County, homes that were $2 million five years ago are still holding value well. The quality, the lifestyle, the location between the coast and the community feel of places like Encinitas are the fundamentals that keep the market solid.

What This Means for You Right Now

If you're thinking about buying a home, here's what matters:

You have more inventory to choose from than you did a year ago. That's an advantage.

Mortgage rates are stable enough to lock in a payment you can count on. That's a win.

Prices aren't crashing, which means the home you buy today will still be an asset you're building equity in, not a liability.

The uncertainty you're feeling? That's normal when there's a lot of noise in the market. But the fundamentals in are still strong.

Here's My Advice

Don't make decisions based on headlines or social media posts. That's the quickest way to miss the right opportunity at the right time.

If you're thinking about buying or selling, let's talk. I work with real estate data every single day. I can give you a clear, fact-based look at what's really happening in your neighborhood, what homes are actually selling for, and whether or not your move makes sense for your timeline and goals.

The market rewards people who act on good information, not people who wait for the "perfect" moment that might never come.

Ready to separate fact from fiction for your situation? Let's connect.

Sam Fakih | Compass Real Estate | Encinitas & Coastal North County Specialist | 21 Years of Local Market Expertise

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