4 Housing Markets Where Home Values Could Plummet Next Year
The housing market's long winning streak is starting to break. Prices are falling in dozens of major cities, and the markets that ran up the fastest during the pandemic are taking the hardest hits.
Here are four worth watching.
Cape Coral, Florida
Redfin data shows the median home sale price fell 2.1% in Cape Coral from a year earlier to about $360,000 over the three months ending May 2026. ATTOM found home prices in the Cape Coral-Fort Myers region fell 9% in the first quarter of 2026, which is the steepest decline among major U.S. markets it tracks.
Alexei Morgado, a Florida realtor and founder of Lexawise, said buyers often underestimate the total cost of owning a home.
“The buyer likes the price until they find out what it costs to own the property," he noted.
Morgado said insurance premiums, homeowners' association (HOA) dues, flood risk, property taxes and maintenance costs have become a larger part of the affordability calculation for Florida buyers.
Tampa, Florida
Redfin data shows the median home sale price in Tampa was about $443,000 over the three months ending May 2026, down 1.4% from the same period a year earlier. Homes also spent a median of 41 days on the market, up from 36 days a year earlier.
But falling prices don't always mean lower costs. Insurify found Florida homeowners paid an average of $8,292 a year for insurance in 2025 after premiums jumped 18%.
San Antonio
San Antonio is another market that's cooled since the pandemic housing boom. Redfin data shows the median home sale price fell 2.6% year over year to about $260,000 over the three months ending May 2026. Homes spent a median of 73 days on the market, up from 58 days a year earlier, and fewer homes changed hands.
Austin, Texas
Redfin's three-month data through May 2026 puts Austin's median home sale price at about $542,000, down 2.3% from the same period a year earlier, and home values remain well below their 2022 peak.
Austin was one of the country's hottest markets during the pandemic, and it drew both homebuyers and investors. Adrian Mathai, founder of AMZA Capital and HardMoneySearch, said markets that grew quickly can also cool more quickly.
"If rent growth slows, resale timelines stretch, or builders offer incentives nearby, private lenders have to be more conservative on value and exit assumptions," according to Mathai.
What Buyers Should Watch
In each of these markets, prices have already started to fall, and the conditions driving those declines show little sign of reversing. None of these markets are necessarily headed for a housing crash. But they do share several warning signs, including rising inventory, affordability pressures and higher ownership costs.
Before making an offer, compare recent price reductions and see how long similar homes have been on the market. Estimate the full monthly cost of ownership, including insurance, property taxes and HOA dues, not just the mortgage payment. In markets where sellers have lost leverage, there may also be more room to negotiate on price or request concessions at closing.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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