America’s 5 Most Overvalued Housing Markets That Are Finally Cooling Off

peeterv / iStock.com

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 Years
Helping You Live Richer

Reviewed
by Experts

Trusted by
Millions of Readers

A report by Zillow found that home prices surged by 45.3% between 2020 and 2025 — more than double that average appreciation rate. 

That caused many housing markets to outpace local fundamentals like income, creating unaffordable homes. Now those chickens are coming home to roost in many of the cities that skyrocketed the most in cost. 

Keep an eye on these overvalued markets that have finally started cooling. 

Honolulu, Hawaii

• Average home price: $773,258 (Zillow)
• Year-over-year price change: -1.1%
• Average days from listed to pending: 39

Homes in Honolulu cost more than double the national average of $367,711, although that may not last. Prices have declined over the past year, and real estate listings are sitting on the market for double the national average of 19 days. 

For Hawaiian homebuyers, that spells some much-needed affordability relief. 

Bozeman, Montana

• Average home price: $743,496
• Year-over-year price change: -0.6%
• Average days from listed to pending: 29

Montana home prices shot the moon during the pandemic, as urban Californians, Oregonians and Washingtonians fled for more open space. Now reality has started setting in, and prices have started settling down. 

Don’t expect them to drop anywhere near 2020 levels, but Bozeman home values remain flat since July 2022 when they reached $742,017. 

Miami, Florida

• Average home price: $595,318
• Year-over-year price change: 1.4%
• Average days from listed to pending: 49

In 2025, surging home prices and insurance premiums have caught up with Miami. Home prices have dropped by 1.09% over the last three months, as the market quickly turns south. 

Real estate broker Anthony Askowitz has seen the market shift over the last few months.

“Sellers have had to negotiate their prices to get properties sold, resulting in the number of days on the market jumping,” he said.

Sure enough, only 6.3% of Miami home sales close above listing price, compared to 79.1% that sell under it. 

Naples, Florida

• Average home price: $586,370
• Year-over-year price change: -6.4%
• Average days from listed to pending: 64

It’s a terrible time to sell a home in Naples. Real estate listings languish for more than triple the national average, and home prices have dropped by a dizzying $40,000 over the last year. High interest rates, soaring insurance premiums, a glut of new supply, and of course too-fast appreciation post-pandemic all collide for a perfect storm of a buyer’s market. 

Austin, Texas

• Average home price: $536,565
• Year-over-year price change: -5.5%
• Average days from listed to pending: 39

Like Honolulu, Austin home listings are lying fallow for double the national average.

“During the post-COVID real estate run-up, Austin saw prices shoot up faster than what local incomes or job markets could realistically support,” explained Larry Shinbaum, real estate broker with Luxuri International. “It just wasn’t sustainable. We’re now seeing a slow correction, with sellers finally adjusting expectations. Homes sitting on the market longer, bidding wars are rare and incentives are back on the table.”

Share This Article: