5 Housing Markets That Will Plummet in Value Before the End of 2025

The U.S. housing market is always changing, but property prices have largely gone up over the years.

In certain markets, particularly in Texas, there’s actually been a more recent a decline. Depending on buyer demand, supply, and other economic factors, some housing markets could plummet in value within the next 12 months or so.

If you’re a buyer, lower housing prices is good news as it means you’re more likely to get a good deal — and maybe even have more negotiating power with sellers. If you’re a seller, you might want to put your home on the market before it loses value or wait until your local real estate market rights itself again.

Whatever the case may be, here are six housing markets that experts believe will lose value before the end of 2025.

• Median home price: $390,000
• Median home price change (year-over-year): – 2.3%
• Average time on the market: 42 days

Dallas, Texas is one housing market where prices have already started to go down and could continue to do so.

“In Dallas, affordability is becoming a serious concern,” said Levi Rodgers, a real estate broker and the founder of VA Loan Network.

“High home prices, paired with the current high rates, are leading to fewer buyers in the market,” he continued. “This could result in a price correction over the next 12 months.”

• Median home price: $268,000
• Median home price change (year-over-year): – 2.7%
• Average time on the market: 46 days

Also in Texas, the city of San Antonio has seen a similar downward trend in home values in the past year.

“… there has been strong growth, but with high rates and a surge of new home construction, supply is outpacing demand right now,” said Rodgers.

When supply outpaces demand, home values tend to decline. This is especially common when homes sit on the market for longer. Given this, Rogers expects the San Antonio housing market to cool off even more by the end of 2025.

• Median home price: $548,000
• Median home price change (year-over-year): – 0.45%
• Average time on the market: 67 days

While home values haven’t declined much in Austin, the typical home stays on the market for over two months. This is a sign of a potentially cooling housing market.

“Austin’s market skyrocketed during the pandemic, particularly with the tech industry boom, but now we’re seeing prices stabilize,” said Rodgers.

He predicts that Austin will continue to see prices decline as more new developments crop up and housing interest rates remain high.

• Median home price: $450,000
• Median home price change (year-over-year): +2.4%
• Average time on the market: 51 days

Interestingly, home prices are actually up in Phoenix, Arizona. That said, some real estate experts still believe the housing market could take a turn in the coming months.

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As is the case in other U.S. housing markets where supply is high and demand is low, this could lead to a decline in prices. Given last year’s performance in Phoenix, it really could go either way.

• Median home price: $490,000
• Median home price change (year-over-year): +3.2%
• Average time on the market: 29 days

Like Phoenix, Boise has seen a price hike in recent years. Nevertheless, the city could see a shift before the end of 2025.

“Boise saw home prices rise quickly in the last few years, but now that’s slowing down,” said Aguinaga.

If interest rates remain high, Aguinaga predicts that even fewer people will be buying homes in the area. This could lead to a further decline in home prices.

There’s no guarantee as to whether or not housing markets will plummet — or rise — in value in the future. But there are signs to look for, including:

• Recent trends in the local housing market
• Buyer demand
• Supply (including new construction)
• Average time homes stay on the market
• Mortgage interest rates (rising rates tend to mean fewer buyers and vice versa)

But there are a few more obscure signs as well. CEO Michael Gevurtz and president Jesse Schulman of Bluebird Lending both predict falling housing prices in the following states:

• Florida. Housing prices will likely fall because of an oversupply of homes on the market (due to increased building), new condo regulations (leading to HOA increase), and higher flood insurance policies
• California. Housing prices could decline because of the state’s high tax rate, higher crime rate, and decreasing job market (combined with an increase in remote work opportunities and more people leaving the state)
• Washington. Home values could fall for similar reasons to what’s happening in California

Please note: All housing data was sourced via Redfin and is accurate as of Sept. 20, 2024.