US Home Prices Plummet: 10 Cities to Watch Now

Discover the 10 cities where home prices are dropping, offering new opportunities for buyers in today's shifting US real estate market.

US residential real estate is currently navigating a complex and dynamic landscape, oscillating between the interests of buyers, sellers, and, at times, a perplexing state of equilibrium where neither party seems to dominate. Recent indicators suggest that a more buyer-friendly market may be emerging, despite the unsettling rise in mortgage rates following a brief respite last month. According to the Realtor.com® September Housing Market Report, median list prices have experienced a year-over-year decline in over half of the 50 largest U.S. markets, with one notable instance reflecting a staggering decrease of more than 12%. This development is particularly encouraging for beleaguered buyers who have been grappling with affordability challenges and a dizzying surge in U.S. home prices, which peaked at an unprecedented $445,000 in June 2023.

As of September, the median price of homes for sale has dipped by 1% compared to the previous year, settling at $425,000. However, it is essential to note that the median price per square foot has risen by 2.3%, suggesting a burgeoning inventory of smaller, more affordable homes that is gradually reshaping the market landscape. Even more promising is the trend of declining US home prices in some of the nation’s most coveted locales, spanning from coast to coast.

The reasons behind this downward trajectory in pricing are multifaceted. In Florida, where four cities rank among the top ten for price reductions, the shift follows a significant boom during the COVID-19 pandemic. The remote work phenomenon undoubtedly played a pivotal role, yet many newcomers to Florida were equally attracted by the allure of no state income tax and favorable political climates. This influx of residents prompted builders to ramp up construction, thereby increasing inventory and contributing to the decline in median prices. Nevertheless, it is crucial to acknowledge that in cities like Miami, median list prices remain a staggering 50% higher than pre-pandemic levels. Additionally, it is pertinent to mention that this data was compiled prior to the onslaught of Hurricanes Helene and Milton, which may further complicate the market dynamics.

On a national scale, the trend of decreasing median list prices is evident, with US home prices also experiencing declines in popular urban centers across the Midwest, West, and South. As the US real estate market continues to evolve, it remains to be seen how these fluctuations will ultimately impact buyer sentiment and market stability in the months to come.