Topline
A pair of metropolitan areas in Florida and the Texas capitol of Austin have some of the most stark drops in home market values so far this year in the U.S., even as Texas and Florida keep growing, according to data provided to Forbes by Zillow and S&P CoreLogic, as the cities cool off from pandemic-era gains and benefit from rising inventory.
Key Facts
Cape Coral, Florida: The southwestern Florida metro has experienced a 1.4% drop in average home value ($395,281) so far this year and a 0.8% slide in home prices from December to April after prices peaked in 2022, according to Zillow and CoreLogic data respectively, as rising inventory has provided buyers with the most negotiating power out of any of the top 100 largest U.S. metros.
Austin, Texas: What was once the hottest housing market in the U.S. during the early days of the pandemic has since cooled off and continued to do so this year, with Austin’s average home value decreasing 1.2% to $466,628 as a surge in construction has increased home inventory 37% higher than pre-pandemic levels, according to Zillow.
North Port, Florida: A metro situated about 45 miles north of Cape Coral, has seen its average home value drop by 1% to $455,626 and home sale prices dip 0.7%, Zillow and CoreLogic say, as high mortgage rates and increasing insurance cost trigger a slide in demand and slowed price increases.
San Antonio, Texas: The same factors cooling down Austin’s home prices have also lowered the average home value by 0.6% to $285,511 in San Antonio—one of the few housing markets boasting an inventory higher than pre-pandemic years, according to Zillow.
New Orleans, Louisiana: Both the average home value ($241,940) and home prices in New Orleans have dropped by half a percent, according to Zillow and CoreLogic, as the metro “never really caught the wave of demand that drastically raised prices for the rest of the country over the course of the pandemic,” Zillow home trends expert Amanda Pendleton told Forbes.
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Where Else Are Home Prices Dropping?
The Nassau-Suffolk metropolitan area on New York’s Long Island and the Deltona-Daytona-Ormond Beach metro in Florida have also experienced a slump in home prices, in addition to Cape Coral, North Port and New Orleans. Nassau-Suffolk has experienced a 1.7% drop in home prices from December 2023 to April 2024, as CoreLogic attributed the change to increased listings dampening prices. The Deltona-Daytona-Ormond Beach metro’s home prices are down 0.2% within the same time period. New listings and homes spending longer stretches of time on the metro’s market have triggered a slowdown in rising prices.
Key Background
Texas and Florida have been some of the fastest-growing states in the U.S. in terms of population, according to Census data, though that growth has slowed somewhat. However, home prices have still stayed low or stagnated in the states thanks in part to a surge in housing supply. Out of the country’s 10 metros where sellers are most likely to reduce home prices, five are located in Florida while two are in Texas, according to a Redfin report.Redfin says Texas and Florida have built lots of homes, allowing them to keep up with demand, especially since a pandemic-era population growth spurt has cooled off and given buyers less competition for housing. Meanwhile, other cities in Florida like Miami, Jacksonville and Tampa have seen their home values surge, even though Zillow still considers them buyers’ markets based on competition for for-sale homes. At a national scale, rising interest rates that made borrowing more costly have been connected to weak home prices, CoreLogic Principal Economist Molly Boesel said. Home appreciation dialed down in May, when competition between homebuyers lessened, according to Zillow, which noted new listings from buyers in the U.S. jumped 8% in May.
What To Watch For
Zillow predicts national home values to grow 0.4% this year and a 1.4% home value decrease over the next 12 months. It also expects 4.12 million existing home sales this year, which would be a nearly 1% increase from the year prior, according to Zillow.
Further Reading
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? (Forbes)
This Pandemic Boom Town Is Also A Surprisingly Wonderful Place To Retire (Forbes)