From the Office of the President, Oakwood Escrow
A Rare Window of Opportunity for Buyers and Investors
San Diego’s real estate market is offering a unique combination of factors that favor buyers and investors:
- Mortgage rates have eased to ~6.75%, down from ~7% earlier this year – lowering monthly payments compared to just months ago.
- Inventory remains elevated, with over 4,200 active listings in June – giving buyers more choices and negotiating power.
- Prices remain stable, with June’s median up just 1.6% year-over-year – still below where we expect them to head as demand returns.
This window, where rates are softening, supply is plentiful, and prices are steady my not last long. Buyers who act now can secure today’s prices, then refinance when rates drop further.
H.R.1 – The Big Beautiful Bill: A Win for Real Estate
Signed into law this July, the One Big Beautiful Bill delivers several significant wins for homeowners and investors:
- Preserves 1031 Exchanges, letting investors defer capital gains when exchanging investment properties.
- Permanently extends the 20% QBI deduction on rental income, boosting after-tax returns for landlords.
- Restores 100% bonus depreciation, accelerating write-offs for improvements and new investments.
- Expands Opportunity Zones, keeping tax deferral and exclusion benefits alive in more areas of San Diego.
- Raises the SALT (State and Local Tax) deduction cap to $40,000, a direct benefit to homeowners in high-tax states like California.
Why the SALT Cap Increase Matters to San Diego Homeowners
For years, San Diego homeowners have felt the sting of the $10,000 federal cap on state and local tax (SALT) deductions, which includes property taxes and state income taxes.
California’s high property values and income tax rates often meant homeowners paid far more in state and local taxes than they could deduct.
Now, with the SALT cap raised to $40,000, many homeowners – particularly those with mid- to high-priced homes can now deduct much more of their property and income tax burden.
Example:
A San Diego homeowner paying $25,000 in combined property and state income taxes can now deduct that full amount on their federal return, rather than being limited to $10,000.
Of course check with your tax accountant, this is not meant to be tax advice, but the way I see it this change lowers effective tax rates, improves affordability, and puts more money back in homeowners’ pockets making owning a home in San Diego more financially attractive.
Rates Likely to Drop Further — Timing is Everything
President Trump has also signaled his intention to install a more rate-friendly Federal Reserve Chair in 2026, with the goal of cutting rates by up to 2%.
- Markets already expect significant rate cuts by late 2025 and into 2026.
- Buyers who purchase today can refinance at lower rates later – locking in today’s price and benefiting from tomorrow’s lower payments.
- Waiting risks paying more for the same home as demand rebounds and prices accelerate.
Why Act Now?
- Benefit Why it matters
- Ample inventory More choices, better negotiating power.
- Tax incentives SALT increase, QBI deduction, bonus depreciation, Opportunity Zones — all fully intact.
- Price stability (for now) Median up just 1.6% YoY — before demand returns.
- Refinance potential Buy now, refinance when rates drop — a double win.
- Expanded Opportunity Zones Tax-deferred or even tax-free gains for qualifying.
San Diego buyers and investors are looking at a uniquely favorable environment: lower rates, strong inventory, and the most pro-real-estate tax package we’ve seen in years. With Opportunity Zones now expanded and key deductions preserved, this is the moment to act strategically. Those who buy now may be positioning themselves for lower future payments, equity growth, and lasting tax advantages. At Oakwood Escrow, we’re ready to guide you and your clients through every step of the escrow process with precision and confidence.
