SAN DIEGO — A study from UC San Diego is predicting there will be a 12% drop in the future of the housing market in San Diego.

The San Diego housing market is cooling off, but a lot of people want to know how cold it will get.

A new study from Allan Timmermann, a USCD distinguished professor of finance and economics created a study using internet search trends to predict the future of the housing market.

Timmermann said when people are in the market for a new home they first head to a search engine.

“Recently search volume has gone down quite a bit in places like San Diego. In fact, our model predicts a double-digit decline in house prices in San Diego over 2023,” Timmermann said.

Timmermann explains his team has done retroactive studies with this data and it is fairly accurate, showing about a 70% accuracy rating.

“The more people are looking for houses in a neighborhood, searching on the internet consistently, the bigger the demand,” Timmermann said.

This study comes a few weeks after Goldman Sachs predicted a 25% drop in San Diego’s housing prices.

“Prices are going to ebb and flow,” said Ken Kaplan, a real estate expert.

“I think the only question is are we in for a big fall or are we in for a slow down?” Kaplan questioned. “What’s indicated so far in the numbers that we’ve seen with inventory, as well as price reductions and time on the market. What we’re seeing now is a slow and gentle correction in this market where it’s becoming more of a buyer’s market than a seller’s market.”

The housing market in “America’s Finest City” is already down by about 2.5% since May 2022 when prices peaked.

But, interest rates are higher than they were last year, giving buyers less buying power.

Kaplan said he is seeing sellers offer incentives to attract more buyers, including paying down the mortgage interest rate.

“Nobody has a crystal ball, there is no one that I know who can say with definitive certainty this thing is going up or coming down,” Kaplan said.

According to Redfin, the average home price in San Diego is $797,000, down from $930,000 in Spring 2022.