San Diego Real Estate FAQ

The most expensive neighborhoods in San Diego County are consistently Rancho Santa Fe, La Jolla (especially the Village, Country Club, La Jolla Farms, and Muirlands), Del Mar, Coronado (including the Coronado Cays and Coronado Village), and pockets of Point Loma such as La Playa and Sunset Cliffs. Luxury homes in these enclaves regularly transact between $3 million and $30 million or more, with oceanfront and view properties commanding the strongest premiums. I represent both buyers and sellers in these markets through Sotheby’s International Realty, one of the most preeminent luxury brands in coastal San Diego.

The San Diego luxury market (generally homes priced $3 million and above) operates on fundamentally different mechanics than the median market. Inventory is thinner, off-market and pre-MLS transactions are more common, and time on market is typically longer (often 90 to 180+ days for trophy properties). Buyer pools are smaller, more international, and more likely to pay cash. In coastal enclaves like La Jolla, Rancho Santa Fe, Del Mar, and Coronado, a single ocean view, lot orientation, or architectural pedigree can swing valuation by millions. I work with luxury clients through Pacific Sotheby’s International Realty in La Jolla, which gives both buyers and sellers access to the global referral network and client channels that move much of San Diego’s high-end inventory.

Yes, and in San Diego’s luxury market this practice is increasingly common. Some sellers of $5 million-plus homes prefer discreet marketing for reasons of privacy, security, tenant or family considerations, or to test pricing without accumulating market days. Compass has Private Exclusives, Sotheby’s International Realty has its own broker exclusive and pre-marketing channels, and well-networked agents routinely transact off-market through trusted broker-to-broker relationships. The tradeoff is real: off-market sales typically reach a smaller buyer pool, which can soften the final sale price compared to a properly orchestrated open-market launch. For buyers, working with an agent who is genuinely plugged into San Diego’s coastal luxury network is often the difference between seeing the right property and never knowing it existed.

International buyers can purchase residential property in San Diego with very few restrictions, but several practical and tax considerations meaningfully affect the transaction. Foreign buyers typically need a U.S. tax identification number (ITIN), and most lenders that work with foreign nationals require larger down payments (often 30% to 40%) and additional documentation; many international luxury buyers simply purchase in cash. FIRPTA (the Foreign Investment in Real Property Tax Act) applies on the sale side, requiring withholding of a portion of the sale proceeds when a foreign owner sells. California also has its own withholding requirements. Estate planning, ownership structure (LLC, trust, individual), and home country tax implications should be addressed before closing, not after. Sotheby’s International Realty routinely works with international buyers from Canada, Mexico, the UK, Asia, the Middle East, and beyond. International buyers should seek out professional legal and tax advice prior to pursuing a purchase in San Diego.

California’s base property tax rate is 1% of assessed value under Proposition 13, with the assessed value tied to the purchase price and capped to grow no more than 2% per year. In San Diego County, total effective property tax rates typically are close to 1.25%, depending on local voter-approved bonds, school district assessments, and any applicable Mello-Roos. On a $1,000,000 San Diego home, that’s roughly $12,500 annually. Buyers should also budget for a supplemental tax bill issued after the property is reassessed at the new purchase price. For more details, please see my article on Property Taxes in San Diego.

Mello-Roos refers to special tax assessments levied through Community Facilities Districts (CFDs) to fund infrastructure, schools, and public amenities in newer master-planned communities. In San Diego County, Mello-Roos is most common in areas developed from the 1980s onward, including portions of Carmel Valley, Del Sur, Pacific Highlands Ranch, 4S Ranch, Santaluz, Torrey Highlands, newer Rancho Penasquitos tracts, Eastlake in Chula Vista, and Otay Ranch. These assessments can add several thousand dollars per year on top of base property taxes and have a fixed expiration date that varies by district. Always review the Mello-Roos disclosure carefully before writing an offer. See the San Diego County tax assessor for more details on Mello-Roos.

San Diego real estate has historically been one of the strongest long-term performers in California due to chronic supply constraints, limited developable coastal land, a diversified economy (military, biotech, defense, tourism, telecom, healthcare), and durable lifestyle demand. Our amazing San Diego weather consistently draws people here as well. Home values have appreciated meaningfully over most 10-year holding periods, though short-term fluctuations are normal. As with any real estate decision, individual returns depend on neighborhood, property type, holding period, and timing. I am happy to discuss specific opportunities with my clients, though I am not a financial or investment advisor, and buyers should consult their own tax and financial professionals as part of any major decision.

San Diego has long been one of the most desirable second-home markets in the country, particularly in coastal areas like La Jolla, Del Mar, Coronado, and parts of Point Loma. The combination of year-round weather, strong lifestyle appeal, and limited coastal inventory has historically supported long-term value. Buyers should approach second-home purchases with a clear understanding of both lifestyle goals and financial considerations. Carrying costs can be meaningful at higher price points, and short-term rental potential (if desired) varies significantly by neighborhood, zoning, and HOA restrictions. Some areas are highly restrictive and do not allow short term rentals at all, while others are more flexible, so this needs to be evaluated early in the process. For many buyers, the primary return is lifestyle rather than pure investment performance. Over longer holding periods, San Diego real estate has generally performed well, but I always advise clients to underwrite conservatively and make sure the property works for them both personally and financially.

Beyond the purchase price, San Diego homeowners should plan for several ongoing costs. Property taxes typically run around 1.25% of the purchase price annually, depending on location and assessments. Homeowners insurance varies widely based on the property, with luxury properties and fire-prone areas carrying higher premiums. Maintenance is another meaningful expense, particularly for higher-end homes. A reasonable guideline is 1% to 2% of the home’s value per year, though coastal properties can trend higher due to exposure to the elements. For condos and planned communities, HOA dues can add several hundred to $2000+ dollars per month depending on amenities and location. At higher price points, these carrying costs become a significant part of the ownership equation, and buyers should evaluate them alongside mortgage payments when determining overall affordability.

There is no single answer to this question. Rental rules in San Diego vary significantly depending on property type, location, and local regulations. Long-term rentals are generally allowed throughout most of the county, though individual HOAs may impose restrictions or minimum lease terms. Short-term rentals, defined as stays under 30 days, are more tightly regulated. The City of San Diego requires a short-term rental license, and availability is limited in certain tiers, particularly for non-owner-occupied properties. Coastal areas and condo buildings often have additional restrictions that prohibit or heavily limit short-term rentals altogether. Buyers considering rental income should verify city regulations, HOA rules, and zoning before purchasing, as these factors can materially impact the property’s income potential.

The NAR settlement, which took effect on August 17, 2024, changed two major things. First, buyer-broker compensation can no longer be advertised on the MLS. Second, buyers must sign a written representation agreement with their agent before touring homes. For sellers, this means the buyer’s agent commission is now negotiated separately rather than appearing as a fixed line item on the listing agreement. Sellers can still offer to pay all or part of the buyer’s agent compensation as a concession, which is now commonly negotiated within the purchase contract. For buyers, it means greater clarity on what they are paying for and a written commitment with their agent. All commissions are fully negotiable and not set by law.

Real estate commissions in San Diego, like everywhere in the United States, are fully negotiable and not set by law. In practice, total commissions on California transactions often fall in the 5%-%6 range. That total commission is commonly split between the listing side and the buyer’s side, though every transaction is different. Following the NAR settlement, buyer’s agent compensation is negotiated separately between the buyer and their agent in a written agreement, and sellers may choose to offer a concession toward that fee. I provide a clear, written breakdown of compensation and services to every client before any agreement is signed.

Escrow in California is a neutral third-party process that facilitates the transaction from contract to closing. Once a buyer and seller agree on terms, an escrow company is retained and escrow is opened to hold funds, coordinate documents, and ensure all conditions of the contract are satisfied before closing. During escrow, the buyer deposits their earnest money, completes inspections, and finalizes financing, while the seller provides disclosures and works through any agreed-upon repairs or credits. The escrow officer coordinates with the lender, title company, and both parties to manage timelines and documentation. Once all contingencies are removed and any loan documents are signed, the transaction moves to closing, where funds are transferred and the deed is recorded with the county. Once this records, ownership officially transfers to the buyer. A typical escrow in San Diego runs 21 to 35 days, though cash transactions can close significantly faster.