7 Southern Cities Where Home Prices Are Expected To Crash in the Next 12 Months
Written by
Stacy Sare Cohen
Edited by
Rebekah Evans
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During the pandemic buying frenzy, the real estate industry saw skyrocketing home prices, rock-bottom interest rates and buyers pulling out all the stops to win bidding wars — offering to pay the seller’s moving costs, waive contingencies, cover appraisal gaps and even offer all-expenses-paid vacations to coveted destinations (think Napa and Aspen) to sweeten the deal. However, that boom has lost its momentum and many markets have since reversed.
According to Zillow, home values have fallen across the country, with the South seeing some of the most widespread declines. Over the past year, 53% of U.S. homes have decreased in value, signaling a broad shift in market conditions. Zillow also reported that 4.1% of homes are now worth less than their previous sale price, while 1.6% have declined by more than 5%.
Zillow’s latest data and forecasts pointed to a modest national correction over the next 12 months, but the impact has been most pronounced in Southern cities. Based on Zillow’s home price data and industry projections, the following seven Southern cities are expected to experience sharp price declines in the year ahead.
Cape Coral, FL
- Year-over-year change: -10.2%
- Median list price: $409,633
- Median sale price: $354,000
Cape Coral will experience one of the largest price corrections, about 10.2%, as a result of rising inventory and insurance premiums, said Geremy Yamamoto, founder of Eazy House Sale.
He attributed the decline to a period of hyper-growth during the pandemic, when a combination of remote work and low interest rates drove home values to unsustainable levels.
“The metro is expected to see home prices slide, as an influx of homes on the market and rising foreclosure rates keep the heat on this five-alarm housing fire,” added Keith Sant, founder and CEO of Kind House Buyers.
North Port, FL
- Year-over-year change: -9.6%
- Median list price: $332,333
- Median sale price: $293,000
Prices in North Port are forecasted to decline by almost 9% over the next year as buyer demand wanes amid high mortgage rates, Yamomoto said. “As is the case in much of Southwest Florida, the region is experiencing a ‘rebalancing act’ where the supply of homes for sale now exceeds demand from qualified buyers.”
Austin, TX
- Year-over-year change: -6.4%
- Median list price: $546,600
- Median sale price: $539,817
Austin is another city that’s seeing a significant decline. “After home values surged faster than nearly anywhere in the U.S. during the pandemic tech boom, the market has shifted,” Yamomoto said. “With hordes of remote workers now returning to their home offices and an oversupply of new builds on the local market, experts forecast a further [cooling] whereby prices settle back to more realistic levels.”
Deltona, Florida
- Year-over-year change: -5.7%
- Median list price: $320,300
- Median sale price: $290,333
Following the lead of its neighboring coastal destinations, Deltona is projected to see home values drop 3.6% over the next year, according to Zack Moorin, founder of Zack Buys Houses. “Increasing homeowner association (HOA) fees and higher insurance rates throughout Central Florida are causing downward pressure on prices, creating more sellers who are ready to deal.”
Raleigh, NC
- Year-over-year change: -2.9%
- Median list price: $416,667
- Median sale price: $446,833
One of the biggest metros primed for a correction is Raleigh, due for a 3.7% price drop, Yamomoto said. “The drop can largely be attributed to an enormous amount of new construction hitting the market, giving buyers more choices and more power than they’ve had in years,” Yamomoto added.
Atlanta
- Year-over-year change: -4.3%
- Median list price: $355,167
- Median sale price: $408,142
Recent predictions show price drops of 1.3% to 1.6% by mid-2026, as high home values have left the market out of balance, Sant said. “It’s not a crash, but the rise in active listings, which has been nearly 20% in some markets, is at long last giving buyers something they haven’t had since the pandemic began — negotiating power,” Sant added.
San Antonio
- Year-over-year change: -3.1%
- Median list price: $285,667
- Median sale price: $274,917
The city of San Antonio is experiencing a much-needed price correction, as home values have risen above area incomes and are adjusting to a healthy pattern, Moorin said.
“Analysts say asking prices are likely to continue to drop as markets soften and an oversupply of single-family homes offered at high mortgage rates that have taken the sheen off homebuyer enthusiasm continues,” Moorin added.
Editor’s note: All Zillow data is accurate as of Jan. 27, 2026.
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