Top 10 Cities Where Home Prices Are Declining the Most

Ever get the feeling that owning a home is becoming a dream further and further out of reach? For years, it felt like house prices were just going up, up, up, especially after the pandemic hit. But hold on a second, the winds might be shifting. Right now, a noticeable number of cities across the US are seeing a dip in their housing prices. Specifically, if you're on the hunt for a potential bargain, keep an eye on the Sun Belt.

This analysis of recent data pinpoints 10 cities where house prices are declining the most, offering a potential silver lining for buyers in a challenging market.

For a long time, the story was about bidding wars and houses flying off the market in days. But the latest numbers paint a different picture. It seems the combination of more homes becoming available, higher mortgage rates making borrowing more expensive, and a general cooling off in buyer demand is finally starting to have an impact. This is leading sellers in certain areas to lower their asking prices to attract buyers, creating an interesting turn of events in what has been a fiercely competitive housing scene.

The Cooling Trend: 10 US Cities Where House Prices Are Declining the Most

Why This Shift Matters

Honestly, this change in the housing market is a big deal for a lot of people. For those who've been patiently waiting on the sidelines, especially younger folks trying to buy their first home, this could be the break they've been hoping for. A drop in prices might finally make homeownership a real possibility.

However, it's a different story for sellers and developers. This cooling trend could mean things are going to get tougher for them. It might take longer to sell a house, and they might not get the prices they were expecting just a year or two ago. Some experts are even suggesting that this could be the start of a longer period of slower activity in the housing market.

Where Are Prices Dropping the Fastest?

Looking at the data, it's pretty clear that the Sun Belt is where a lot of the action is happening when it comes to price reductions. In fact, nine out of the ten cities on the list are located in this sunny region, with Florida having more than half of them.

Realtor.com's data from April shows that nearly a third of the homes listed in North Port and Tampa, Florida, had their prices cut. Following closely behind were Cape Coral and Jacksonville, also in Florida, with over 28% and 27.5% of listings seeing price reductions, respectively. Interestingly, Denver, Colorado, is the only city outside of the Sun Belt to make it into the top ten.

What's driving this trend in these cities? Well, it's largely due to a significant increase in the number of homes available for sale compared to last year. The jump in inventory ranges from almost 28% in Palm Bay, Florida, all the way up to a whopping 65% in Denver.

Let's take a closer look at each of these ten cities:

1. Phoenix, Arizona: Leading the pack, a significant 31% of home listings in Phoenix have seen price reductions. There are currently around 19,981 properties on the market, which is a 33% increase compared to last year. The median list price here is around $525,000, and homes typically stay on the market for about 52 days.

2. North Port, Florida: Coming in second, 30% of listings in North Port have had their prices reduced. With 11,234 homes available (a 32% year-over-year increase), the median asking price is about $490,500, and homes are staying on the market for an average of 70 days.

3. Tampa, Florida: In Tampa, 29% of the listed homes have seen price cuts. There are currently 19,310 homes for sale, marking a 32% rise in inventory. The median price is around $410,000, and homes spend an average of 58 days on the market.

4. Cape Coral, Florida: Cape Coral shows a similar trend, with about 28% of homes having their prices lowered. The number of listings has jumped by 41% to 14,580, and the median price is approximately $435,000. Homes in this area are taking longer to sell, averaging around 81 days on the market.

5. Jacksonville, Florida: In Jacksonville, 28% of homes have seen price reductions. The city's inventory has increased by 35%, reaching 9,676 listings, with a median list price of about $399,995 and an average of 57 days on the market.

6. Denver, Colorado: Bucking the Sun Belt trend, Denver reports that 27% of its listings have price reductions, amidst a sharp 65% surge in inventory, now totaling 10,345 listings. The median home price is around $599,450, and properties are selling relatively quickly, spending an average of just 36 days on the market – the fastest among the top 10.

7. Palm Bay, Florida: In Palm Bay, 27% of listings have price cuts. Inventory has risen by 28% to 4,562 properties, with a median list price of around $389,825. Homes here average 61 days on the market.

8. Deltona, Florida: Deltona has also seen about 27% of its homes marked down in price. Listings have climbed to 6,892, up by 31%, with a median asking price of around $394,450 and an average market time of 70 days.

9. Austin, Texas: Twenty-six percent of Austin's 11,073 listings have been reduced in price. Inventory is up by 25%, and the median list price is around $525,000. Homes here sell slightly faster than most on the list, averaging 44 days on the market.

10. Charleston, South Carolina: Rounding out the top 10, Charleston reports that 26% of its listings have price drops. Inventory has surged by 42% to 3,542 homes; the median price is around $525,000. Homes typically sell in about 41 days.

What Experts Are Saying

It's not just the numbers that tell the story; the experts are also weighing in. Hannah Jones, a senior economic research analyst at Realtor.com, points out that as more homes become available and take longer to sell, sellers are more likely to reduce their prices to grab buyers' attention. She believes this puts buyers in a strong negotiating position, with sellers likely to be flexible on both price and terms.

As reported by Newsweek, Nick Gerli, CEO of the app Reventure, has been quite vocal on social media about the housing market in Florida. He suggests that the state is already in a housing downturn, with prices dropping across the board. He believes this trend will likely continue for years due to an oversupply of homes coupled with a significant lack of affordability.

Gerli has also highlighted that while some areas like New York are still seeing price increases, Florida has already experienced a 2.4% drop in house prices over the past year. Reventure estimates further price declines of around 5% in Florida in the coming year.

Looking at Arizona, Gerli notes that home prices are down by 6.9% from their peak in June 2022. He predicts that the market correction in Arizona is “going to accelerate over the next 12 months” due to a large amount of inventory causing sellers to feel pressured.

What Could Happen Next?

Based on these trends and expert opinions, it seems likely that we'll continue to see price adjustments in these and potentially other markets. For buyers in these areas, this could present some real opportunities to find a home at a more reasonable price. However, it's crucial to remember that the housing market is complex, and local conditions can vary significantly.

For sellers, it might be a time to adjust expectations and be prepared for longer selling times and potential negotiations. The rapid price increases we saw in recent years might not return anytime soon in these specific markets.

As someone who's been watching the housing market closely, I think this shift is a much-needed breather after a period of intense competition. While it might present challenges for some, it could open doors for many who have been waiting for a chance to become homeowners. It's a reminder that the housing market is cyclical, and what goes up can indeed come down. Keeping a close eye on these trends will be crucial for both buyers and sellers navigating the market in the months ahead.