American cities where house prices are crashing fastest
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The red-hot housing market is starting to cool — and, in some cities, prices are already dropping. House prices have soared almost 50 percent since the pandemic, but fears of a recession tied to Trump's aggressive tariffs have put homebuying on pause for many Americans. This drop in demand is hitting prices. In fact, 10 of the 50 biggest cities saw prices decrease year-on-year, mostly in Texas and Florida, according to the latest data from Redfin.
'A lot of buyers, especially first-timers, are backing off because they're nervous about a potential recession,' Redfin agent Venus Martinez explained. 'Some house hunters are hanging out on the sidelines because they're hopeful mortgage rates will come down soon. 'The buyers who are still active, typically those who need to move, are picky and unwilling to pay over asking price.
Meanwhile, inventory is rising. New listings are up more than 11 percent from a year ago, Redfin reports. And with more homes hitting the market and fewer buyers biting, sellers are increasingly being forced to slash their prices. Jacksonville in northern Florida saw the biggest decrease in house prices.
Its median sale price dropped 2.8 percent since the same time last year. Florida is in the throes of a housing crisis, as increased regulations following the Surfside Condo collapse in 2021 have triggered a steep rise in Homeowner's Association fees and insurance costs.
As a result, many residents and second-home owners are trying to offload their properties, causing a glut in the market. Orlando was the second Florida city to see a fall, with its median sale price dipping by 0.4 percent. Texas saw the most cities with falling house prices over the last year.
San Antonio has dropped 1.8 percent since last April, Austin has seen a 1.2 percent fall, Dallas is down 0.8 percent and Fort Worth has dropped 0.2 percent. Texas became a boom state during the pandemic due to its warm weather, low tax rates and affordable housing compared to major coastal cities.
However, the rapid increase in housing costs has put people off and had a negative effect on the housing market. Places like Dallas and Austin were once seen as affordable alternatives to high-cost cities like San Francisco and New York, but now the gap in housing costs between big-city job centers and Sun Belt metros has shrunk.
Moving to Texas is also less attractive than it used to be because of the increasing frequency and intensity of climate disasters such as hurricanes. This has led to skyrocketing insurance premiums and rising HOA costs across many major cities.
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