Additional Coverage:
Property values across much of the country have experienced rapid growth in recent years, driven by remote work trends and historically low mortgage rates. However, this upward momentum is shifting in certain regions, signaling a potential cooling in the housing market.
Realtor.com’s 2026 housing forecast projects that home prices will decline in 22 of the 100 largest metropolitan areas nationwide over the next year. These declines are primarily concentrated in the Southeast and West, where pandemic-driven demand has waned, housing inventory has increased, and buyers are gaining more negotiating power.
Here’s a closer look at ten cities where experts anticipate home prices will drop in the coming year, along with insights for both prospective buyers and current homeowners:
- Cape Coral-Fort Myers, Florida
The market here is expected to see a price decrease exceeding 10%. Rising insurance costs, hurricane-related concerns, and a swelling supply of homes have softened demand.
For buyers, this presents an opportunity to negotiate favorable deals, including price reductions and interest rate buy-downs. Local realtors recommend partnering with a knowledgeable agent to navigate the market effectively.
- Tampa, Florida
Tampa’s recent building boom has expanded housing options, creating a more balanced market. While sellers may experience slower price growth, buyers should consider upcoming legislative changes, such as the Save Our Homes Act, which could affect tax benefits on future purchases.
Despite these changes, Florida’s lack of state income tax and property tax exemptions remain attractive.
- North Port-Sarasota-Bradenton, Florida
An anticipated 8.9% price decline is attributed to increased construction and diminished pandemic-era demand. Retirees in particular should weigh additional costs like insurance, property taxes, HOA fees, and flood insurance before buying, and be prepared to hold onto properties through potential price declines.
- Riverside-San Bernardino, California
Demand remains steady, but inflation, rising mortgage rates, and a 30% jump in insurance premiums are tempering the market. Experts advise retirees to prioritize affordability and ensure their income comfortably supports their housing choices to avoid financial strain.
- Raleigh, North Carolina
Raleigh has experienced similar migration patterns to Florida but faces higher prices and mortgage rates that have dampened buyer enthusiasm. Insurance costs are a critical consideration for retirees, as they can significantly impact long-term affordability.
- Sacramento, California
After a surge of remote workers from the Bay Area, Sacramento’s housing market has cooled. Affordability challenges and reduced demand mean homeowners should temper expectations for rapid appreciation moving forward.
- Naples-Marco Island, Florida
Climate-related insurance costs are a major factor weighing on prices in this luxury market. Buyers are advised to conduct thorough inspections and factor in potentially high insurance premiums, which could increase monthly expenses substantially.
- Austin, Texas
An oversupply of homes coupled with elevated mortgage rates has led to more frequent price reductions. Buyers should consider the total cost of ownership-including taxes, insurance, and local economic conditions-rather than focusing solely on purchase price.
- Phoenix, Arizona
The market is adjusting after years of rapid appreciation and aggressive construction. Cash buyers in 55+ communities may find attractive opportunities, while sellers face challenges unless their homes are move-in ready and priced appropriately.
- Oxnard-Thousand Oaks-Ventura, California
Despite its desirability, this market is becoming increasingly costly. Buyers have gained more leverage in negotiations, though sellers of upscale and move-up properties may encounter longer selling times than in previous years.
Key Takeaway:
While a broad market crash is unlikely, certain previously hot markets are undergoing price corrections.
These shifts offer buyers the chance to purchase homes in sought-after locations at reduced prices. Current homeowners should adjust their expectations regarding future appreciation to maintain financial stability.
As Ari Rastegar, owner of Rastegar Property Company, notes: “For the first time in several years, buyers can negotiate on price, request repairs, obtain seller concessions, and take the time to perform proper due diligence.”
Smart Financial Steps for All:
- Increase your income: Explore side hustles or strategies to keep more of your earnings.
- Grow your wealth: Harness the power of time and compound interest by planning carefully and, if needed, consulting financial professionals.
- Seize opportunities: Maximize senior discounts, shop wisely for insurance, and avoid hidden expenses that erode savings.
Understanding these trends and preparing accordingly can help you navigate the evolving housing landscape with confidence.