Downtown San Diego Market Update – December 2025 & Year-End Wrap

December closed out what was clearly one of the slowest years Downtown San Diego has seen in a long time. The month finished with 29 total sales, tying it for the slowest month of the entire year, which is very much in line with the normal seasonal slowdown we typically see in December.

While activity was slow, inventory levels were also lower than what we saw at the peak of 2024. Downtown began 2025 with 177 active listings, compared to nearly 300 listings at the high point last year. So although sales were soft, the market was also operating with less available inventory than it had during the oversupplied phase in 2024.

How 2025 Compares to Past Years

For the full year, Downtown San Diego recorded 486 total sales in 2025. That compares to 549 sales in 2024, marking a meaningful decline in activity year-over-year. However, the bigger perspective comes when you look back at what “normal” used to look like. From 2015 through 2019, Downtown typically saw 760 to 967 sales per year. That means 2025 was down between 36% and nearly 50% compared to those pre-pandemic years.

The contrast becomes even more dramatic when compared to 2021, the most active year Downtown has ever recorded. That year saw 1,344 sales, meaning 2025 activity was down roughly 63% from that peak. This officially makes 2025 the slowest year on record since Downtown sales have been tracked.

Some of this decline needs to be viewed in context. Downtown San Diego is still relatively young. Many of its high-rise buildings were delivered between 2002 and 2007, and in the years that followed, natural growth in inventory pushed sales volumes higher. Construction then slowed significantly between 2009 and about 2017, before new projects like Pacific Gate and Sedona added more units back into the market. Layer in the pandemic-era buying surge, and it’s clear why recent years created an artificial spike that 2025 is now correcting from.

Fourth Quarter Trends

Looking specifically at the end of the year, Q4 sales were down 13.4% compared to Q3, and almost 15% lower than Q4 of 2024. The slowdown wasn’t isolated to one month—it was consistent across the final quarter of the year, reinforcing that 2025 was a broadly slower cycle rather than a short-term dip.

A Potential Shift Ahead

There is one meaningful positive development heading into 2026: interest rates have moved sharply lower. As of January 9th, national 30-year mortgage rates are around 5.99%, a big improvement from where they had been over the previous 18 months. This followed news that the federal government may have Fannie Mae and Freddie Mac purchase roughly $200 billion in mortgage-backed securities, which would help further stabilize and reduce borrowing costs if implemented.

Lower rates don’t instantly fix a slow market, but they do change buyer psychology and affordability—and after two years of suppressed demand, even modest rate relief can begin to unlock activity.

Sign Up For Our Newsletter

A Downtown Professional You Can Trust!

Give me a call today at (619) 228-6790 or email me at Ryan@livingthesandiegolife.com for more information or to schedule a tour of the neighborhood!