San Diego luxury housing picks up, while the traditional market stalls

San Diego home sales are near 40-year lows, but one segment of the market has seen a gold-plated surge.

Affluent buyers in San Diego County have snapped up luxury properties — at record prices — at the quickest pace in more than three years. A Del Mar beach home smashed local records when it sold for $50 million in late October, on the coattails of a $47 million home sale in La Jolla just a week earlier.

The market sale time was 223 days for a San Diego County home costing $6 million and up in mid-November, said Reports on Housing, down from 750 days at the same time last year. Meanwhile, every other price category, even the least expensive, have seen the time it takes to sell increase. It’s the fastest pace for luxury since April 2022 when inventory plummeted and the overall real estate market was red hot.

“There’s people flush with cash,” said Steven Thomas, of Reports on Housing, citing stock market gains over the past few years for wealthy investors.

Meanwhile, the rest of the market is so slow that it makes the Great Recession seem like boom time. There were 25,920 home sales in San Diego County in 2024, the second slowest year in records going back to 1988. The lowest was in 2023 at 25,317 sales, and this year (through August) may break both records. For context, there were 33,020 home sales in 2007 during the housing crash.

“It’s hard to wrap your head around,” Thomas said, “this K-shaped economy.”

A “K-shaped” economy refers to the gap between affluent consumers who are seeing their wealth increase — the upward-slanted stroke of a “K” — compared to low- and middle-income consumers who are struggling financially — the letter’s lower-slanted stroke. The growing income divide has become a big talking point among economists in the past several months.

Experts have cited affordability issues for the general public as reasons for a slowdown, from still-high prices to mortgage rates higher than they had been during the pandemic buying spree. President Donald Trump floated the idea of a 50-year mortgage in early November.

The luxury market faces a lot of the same headwinds — uncertainty about the economy, tariffs and employment concerns — but it’s hard to argue that it’s not seeing bit of a boost. There were 21 homes at $6 million and up in escrow in the last 30 days, said Reports on Housing, compared to six at the same time last year. Could it just be there are more homes at that price listed for sale? No, Thomas said, because there were 156 homes at $6 million and up listed in the last 30 days, and there were 150 homes at that price listed at the same time last year.

“It is actually a gigantic, substantial change,” he said, “of people buying ultra-luxury homes in San Diego County.”

Reports on Housing calculates market sales times by looking at how fast homes are selling in a 30-day period based on how many houses are actually listed for sale. That’s different than traditional days on market, which looks at how fast homes sell and calculates an average without considering the actual number of listings. It basically looks at the number of days it would take to sell all the homes at a certain price at the current buying pace.

San Diego County’s luxury market only makes up 3% of the market, but some real estate agents might have more favorable conditions if they are just now listing properties.

The San Diego Union-Tribune toured an opulent mansion recently in Rancho Santa Fe listed for $17 million. It had been taken off the market in early September after not selling for more than a year. For the ultra-rich, it could be considered a deal.

The 17,332-square-foot mansion on Winland Hills Drive, with nine bedrooms and 11 bathrooms, was constructed in 1995 by a wealthy Chinese family, and it’s not a stretch to call it over the top. There are copper, stone and jade statues (some commissioned for the house and others transported from overseas); numerous fountains, koi ponds, pools and hot tubs; space to park a limousine; chandeliers that look like they cost more than a new car; and hand-carved stone all over the place.

Some of the artwork could probably use an appraiser. For instance, there are two 5-foot-tall Chinese guardian lions sitting on one of the balconies. Are they from the Han Dynasty or made by a San Diego artisan in the 1990s? Nobody is quite sure.

In August 2024, an overly exuberant real estate agent listed the mansion for sale at $27.5 million. It was lowered several times until it hit $18.9 million in September. Real estate agent Tim Van Damm got the listing a few weeks ago and decided to start at a lower price to better match comparable sales in the area.

It’s much more common for luxury homes, compared to median-priced homes, to start at lofty price points and come down once a sale is made. Large price drops do not necessarily mean there is weakness in the market. For instance, the record-breaking Del Mar mansion that recently sold for $50 million was first listed for $75 million.

Van Damm said it would be impossible to build the place today for $17 million, maybe costing close to double that, especially considering all the custom artwork. Other features include a home movie theater, a two-story library, roof deck, fountains and private guest quarters. It also happens to be next door to a 229-acre site owned by Bill Gates.

In a world of the top 1%, they might smell a deal, said Alan Gin, an economist at the University of San Diego. He said large stock market gains, and favorable tax rates, have meant more wealth is concentrating at the top. So, it’s not out of the question that luxury housing may see a bump.

“To us, $17 million sounds like a huge amount,” he said, “but for the very rich, they might think it’s a deal with $10 million off the price.”