The cities where house prices are set to DROP – and most are in the south

Skyrocketing home prices are expected to fall in several metropolitan areas in the southern United States.

The cost of real estate only continues to rise in states like New York and Connecticut. However, a new one report from financial analytics firm CoreLogic indicates that several urban areas, especially in the South, are likely to see a decline.

Despite skyrocketing home prices in cities like Miami and West Palm Beach, two metro areas in the Sunshine State are expected to see a decline: the Palm Bay-Melbourne-Titusville region and the Deltona-Daytona Beach-Ormond Beach region.

In each city, CoreLogic analyzes predict a greater than 70 percent chance of a price drop in spring 2025, classifying the risk level as ‘very high’.

This also applies to other metropolitan areas. Just across the border, the Atlanta-Sandy Springs-Roswell region of Georgia is expected to see a decline, as is the Greenville-Anderson-Mauldin metro in nearby South Carolina.

Four of those regions are in the South, including the Greenville-Anderson-Maudlin metro in South Carolina (Photo: City of Greenville)

These turning tides are not limited to the south either; on the other hand, Spokane and Washington’s greater Spokane Valley will experience a price drop.

Nationally, CoreLogic analysts expect annual house price growth to slow somewhat in 2025.

High interest rates have taken an undeniable toll on the real estate market report from the National Association of Realtors found that U.S. sales fell 1.9 percent year over year from April.

The average sales price in April was $407,600, up 5.65 percent year over year and up 3.58 percent from a month earlier.

The South lagged somewhat behind these trends, with median home prices rising to $366,200, up 3.7 from 2023.

The ongoing housing shortage, which some analysts consider a “crisis,” poses another problem for potential homebuyers.

This scarce inventory is exacerbated by factors such as the lingering effects of the Great Recession and skyrocketing mortgage rates, which reached a more than two-decade high late last year.

The Atlanta-Sandy Springs-Roswell metropolitan area in Georgia is among those with a 70 percent chance of a drop in home prices next year (Photo: City of Atlanta)

The trend is not limited to the south either; Washington’s Spokane Valley (pictured) is also included in the forecasts

The dramatic increase in home prices presented a challenge for home buyers at what is historically the busiest time of year. More than a third of all homes sold in a given year are purchased between March and June.

The National Association of Realtor’s home sales index fell 7.7 percent in April from the previous month, the first decline since January.

“The impact of rising interest rates in April dampened home purchases even as more inventories entered the market,” said Lawrence Yun, the group’s chief economist.

However, Yun continued that “the Federal Reserve’s expected rate cut later this year should lead to better conditions, with better affordability and more supply.”

Despite rising house prices and mortgage rates, hopeful first-time buyers seem optimistic about the market in 2024.

Nearly three in four Americans planning to buy their first home are confident in the housing market and their personal finances, according to TD Bank’s First-Time Homebuyer Pulse survey.