The San Diego Business Journal published our analysis of San Diego's ultra-luxury market this week. The piece examined how the market for homes priced above $10 million is behaving differently from the broader housing market.
Here's what we left out.
Read the full SDBJ article: San Diego’s Ultra-Luxury Residential Markets: Evidence of a Structural Golden Age
The Pattern That Matters
Since 2019, homes over $20 million have sold consistently every single year—including 2022 when interest rates paralyzed most of the market.
That's not random. It's structural.
These buyers aren't worried about mortgage rates. They're making decisions about where to park capital. When your choice is keeping $25 million in cash or buying a scarce asset in Rancho Santa Fe, the math looks different.
We saw this happen: buyers paused briefly in late 2022, then came back in 2023. Not because rates dropped—they didn't. But because their stock portfolios recovered.
Why These Three Markets
Rancho Santa Fe: The Covenant controls what gets built and how it looks. New construction happens slowly. This creates real scarcity, not artificial limits.
Del Mar: Ocean on one side, hills on the other. Voters reject density. Result: 4,000 residents in 1.7 square miles with no way to add supply.
La Jolla: Coastal location plus proximity to UCSD and Scripps. When international buyers look at U.S. markets, La Jolla competes with Malibu and Montecito.
These aren't just nice neighborhoods. They're genuinely limited assets with global recognition.
The $2,000 Per Square Foot Shift
Ten years ago, $1,000 per square foot was exceptional here. Five years ago, $1,500 was rare. Today, $2,000+ happens regularly.
Why?
Construction costs increased—labor, materials, engineering for coastal conditions. But the bigger factor is buyer willingness to pay for genuine scarcity in a recognized market.
A tech executive looking at a $15 million Rancho Santa Fe home isn't comparing it to national averages. They're comparing it to Atherton ($3,000+/sqft) or Montecito ($2,500+/sqft). By that standard, San Diego still looks reasonable.
The Interest Rate Question
People ask: if rates don't matter to luxury buyers, why would lower rates in 2026 help prices?
Two reasons.
First, when borrowing costs drop, the value of long-term assets like real estate increases. That's just math.
Second, falling rates usually mean confidence is returning. That boosts stock markets, which is where wealthy buyers hold most of their money. Their ability to buy real estate follows their portfolio values, not mortgage rates.
So these buyers don't need financing, but they're not immune to what's happening in capital markets.
What This Means Practically
For Sellers: The market above $10 million has real depth now—not like 2019 when you'd wait forever for one buyer. But pricing still matters. Overprice by 10% and you're waiting for a completely different buyer pool.
For Buyers: More competition than a few years ago. Well-priced properties move quickly. "I'll wait and see if it drops" doesn't work anymore at this level.
For Owners: If you bought in the last 5-7 years, you likely have meaningful appreciation. More importantly, you own an asset in a market that's proven resilient. That matters beyond just price.
The Bigger Picture
The article calls this a "structural golden age." That might sound like marketing, but look at the evidence:
- Transaction volume tripled (10 sales to 36 annually)
- Pricing reset higher and held
- Buyer pool expanded globally
- Market proved resilient through volatility
This isn't a temporary spike driven by easy credit. It's built on actual scarcity, demonstrated demand, and buyers making long-term decisions.
Previous peaks were speculation. This one is fundamentals.
That's the difference.
Questions?
Want to discuss how these trends affect your situation? Reach out.
Sean Barry
(858) 945-4314
[email protected]
Read the SDBJ piece: San Diego’s Ultra-Luxury Residential Markets: Evidence of a Structural Golden Age
