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For anyone following along, the housing market has seen some ups and downs in recent years. While it’s impossible to predict the future, many experts expect the home prices to fall in several states over the next 12 months.
This guide explores which states are expected to see dramatic drops in home sale prices based on these market predictions from Forbes.
Florida
Home prices are falling in some cities across Florida.
Cape Coral, located in southwest Florida, stands out for some of the most dramatic drops. A recent report from The Wall Street Journal found that home prices in the Cape Coral-Fort Myers area have dropped by over 11% in the last few years. Homes in the area are sitting on the market for extended periods of time, which is pushing prices lower. Additionally, almost 8% of Cape Coral homeowners owe more than their homes are worth, all setting the stage for a potential housing crash in the area.
Other cities in Florida seeing home prices fall quickly include North Port, Tampa, Jacksonville, Palm Bay and Deltona, according to Newsweek.
Beyond individual cities in the Sunshine State, plummeting condo prices have rocked the real estate world in the coastal regions of the state, particularly in South Florida, per Tampa Bay Times. After the tragic Surfside condo collapse, the state increased safety regulation and inspection requirements, which added up to extra costs for condo owners. As the costs of ownership skyrocketed, many owners tried to sell out, essentially flooding the condo market and leading to falling condo prices across the state.
Texas
The Lone Star State is seeing home prices fall, which could represent the beginning stages of a crash. With home prices dropping in major Texan cities, including Austin and Dallas, rising inventory is contributing to falling prices, according to Zillow.
California
California home prices are slipping, but not by much. As of writing, the average home value in California is $786,107, which is down by 0.6% from last year, per Zillow.
But with home sales in the state already down 37% from their pandemic peak, according to Newsweek, it’s unclear how far California home sales can fall.
North Carolina
North Carolina has seen home values fall around the state, particularly in more populous cities, like Charlotte and Raleigh. Across the state, home values are down by 0.6% in the last year. But in Raleigh, the downside has been significantly larger, with average home values down by 2.2% in the last year.
What This Means for You
A potent combination of high interest rates and growing inventory in these once-hot markets is forcing a cool down. For sellers, this could mean getting less value out of their home. For buyers, it could represent an opportunity to move forward on a home purchase.
As you consider a home purchase, keeping an eye on market factors can be helpful. But before purchasing a home, the most important thing is that your financial situation is in the right position for homeownership. If it’s not, even a market downturn might not mean it’s time for you to purchase a home. Instead, you might need to take time building up your financial situation before jumping into a home purchase.
Takeaway
Many factors contribute to falling home values across the country. As the housing market cools from a hot seller’s market into a buyer’s market, home values are also sliding.
But not all housing markets across the country are being impacted equally. Specifically, housing markets in the South and West seem to be losing steam while those in the Northeast and Midwest seem to be ticking along with modestly rising property values.