For many San Diego homeowners whose children have flown the nest, the prospect of downsizing is both exciting and daunting. The big question on everyone’s mind: is now the right time to make a move? Over the past few years, high interest rates have given many empty nesters pause, but the landscape is changing—and with the right strategy, this could be a golden opportunity to get ahead of the curve.

San Diego’s Market: Caught in the Middle

San Diego continues to be one of the most desirable real estate markets in the country, with strong home values and a steady stream of buyers. However, affordability remains a challenge. Higher mortgage rates have kept many would-be downsizers on the sidelines, even those sitting on significant home equity. The thought of swapping a low-rate mortgage for a new, higher-rate loan—often for a smaller home—has been a major roadblock.

Why Many Have Waited

For the past three to four years, elevated interest rates have made it tough for empty nesters to justify a move. Nationally, this trend has played out in countless households: people are staying put, waiting for rates to drop before making big decisions. In San Diego, where the cost of living is already high, this hesitation is even more pronounced.

The Affordability Factor—and the Out-of-State Trend

Affordability concerns don’t just affect downsizing within San Diego—they’re also driving a growing number of residents to look beyond California’s borders. In recent years, there’s been a noticeable uptick in people moving out of state, seeking more affordable housing, lower taxes, and a slower pace of life. States like Arizona, Nevada, Texas, and Idaho have become popular destinations for San Diegans looking to stretch their retirement dollars further. For empty nesters, selling a high-value San Diego home and relocating out of state can mean a dramatic lifestyle upgrade, with extra cash in the bank and a lower cost of living.

What’s Changing Now? A New Fed Chair on the Horizon

The real estate market is always evolving, and 2026 brings a particularly notable shift: the appointment of a new Federal Reserve Chair. This change at the top of the nation’s central bank could have significant implications for interest rates. Historically, a new Fed Chair often brings a fresh approach to monetary policy, which can influence the direction of mortgage rates. Many experts are watching closely to see whether the new Chair will prioritize keeping inflation in check or take a more growth-friendly stance, potentially leading to lower rates.

While it’s impossible to predict exactly how rates will move, the transition could spark greater volatility—and possibly new opportunities—for buyers and sellers alike. Some economists believe we may see a gradual easing of rates as the new Chair seeks to balance economic stability with affordability concerns. For empty nesters, this could mean a window of opportunity to make a move as borrowing costs potentially become more favorable.

Why Getting Ahead of the Market Makes Sense

While waiting for rates to drop can feel like the safer bet, there’s a compelling case for acting now—especially for empty nesters looking to downsize. In San Diego, condos and smaller homes have been hit harder by the recent market decline compared to larger properties. This means there are more opportunities to buy at a relative discount, maximizing the equity you’ve built up in your current home. By making a move now, you can lock in a lower purchase price for your next home, rather than risking higher prices if demand rebounds when rates eventually fall.

And here’s the smart move: if you buy now and rates do drop in the future, you can always refinance to take advantage of lower monthly payments. This two-step strategy—buying at a lower price and refinancing later—can put you in a stronger financial position than waiting on the sidelines for the “perfect” moment.

Key Considerations for Empty Nesters

• Equity: San Diego homeowners often have significant equity to leverage, whether moving locally or out of state.

• Timing: Waiting for the “perfect” market can be risky; sometimes, personal readiness and lifestyle goals matter more than market timing.

• Tax Implications: Downsizing or relocating can have tax benefits, especially for retirees—consult a professional to understand your options.

• Lifestyle: Think about what matters most: proximity to family, community amenities, or a change of scenery?

• Market Shifts: Stay informed about economic changes, like the new Fed Chair, that could impact rates and affordability in the coming months.

• Strategic Moves: Take advantage of lower condo and small home prices now, and refinance later if rates drop.

The Bottom Line

For San Diego empty nesters, the decision to downsize is deeply personal. The market is shifting, and while challenges remain, new opportunities are emerging, especially with big changes ahead in national economic leadership. Getting ahead of the market now, while prices for smaller homes are more favorable, could be the smartest move you make. Whether you’re considering a smaller home nearby or a fresh start in a more affordable state, now is a great time to explore your options, crunch the numbers, and envision your next chapter.

For help on your Real Estate decision, give me a call 858.229.1625 or email me Darel@abundantpathhomes.com