7 Housing Markets That Are Cooling Off Heading Into 2025

The housing market is finally showing some signs of thawing in certain locations, which coupled with decreasing mortgage rates is good news for many buyers who have been left on the sidelines for many months.

In addition, in certain metro areas, the cooling off is particularly salient, meaning that inventory is higher than demand, helping drive prices lower — another boon for home shoppers.

Here are some of the markets that are cooling off heading into 2025, according to experts.

In the Miami metro area for instance, home prices are tumbling, while inventory continues to build, according to Hannah Jones, Realtor.com‘s senior economic research analyst.

As Jones said, following a red-hot pandemic-era market, Miami home shoppers pulled back due to sky-high prices.

“Demand has not returned to the area, leading to a significant increase in inventory and falling prices,” she said, adding that condo inventory is the main driver of both trends.

“Condo inventory has climbed, leading to overall inventory growth and the falling median listing price,” Jones added.

Indeed, median listing price for the Miami-Fort Lauderdale-Pompano Beach area is $525,000, a startling 12.4% year-over-year decrease, according to Realtor.com.

In that metro area, prices fell 9%, while  inventory picked up by a whopping 65% year-over-year in September, Jones said.

“Though prices have fallen in Little Rock, they remain roughly 40% higher than pre-pandemic,” she said. “As a result, buyer demand faded and inventory climbed.”

In Honolulu, prices dropped 13% and inventory picked up 50% annually in September, according to Jones.

As she explained that high prices have kept buyers at bay, as they are waiting for affordability to improve before finally taking the leap.

“However, the Honolulu market has seen improving conditions, with the share of inventory priced below $500,000 climbing 4 percentage points year-over-year,” she said, adding that this increase in affordable inventory has brought the median price lower and inventory higher in the market.

Once the hotbed for tech-driven real estate, Seattle’s housing market is starting to chill, according to Dutch Mendenhall, co-founder of RADD Companies.

“With rising mortgage rates, tech layoffs and a movement toward working from home, that urgency is gone,” he said.

He added that on the inventory side, the spate of new condos and single-family homes reaching the market also weighs in.

“The Seattle housing market is forecasted to keep cooling through 2025 because demand is low and inventory is increasing,” he added.

Denver is also finally seeing its real estate market cool down, with more homes hitting the market. What’s more, this inventory has particularly increased in suburban areas, giving buyers more options and dialing back the aggressive bidding wars seen in recent years, according to Mendenhall.

“Demand will continue to wane, forcing the sellers to reconsider asking prices and cool Denver’s market well into 2025,” he added.

Las Vegas is another market that’s cooling off, as with more properties coming on the market and fewer investors eager to scoop them up, the inventory is rising, according to Travis Johnson, owner of MN Nice Home Buyers.

“Homes aren’t flying off the shelves like they were a year ago, and we’re starting to see price reductions across the board,” he said, adding that this trend indicates that the market is adjusting to a slower pace as we head into 2025.

Sacramento is another city where the market has cooled off after a pandemic-fueled boom.

“With rising interest rates, buyers have become more cautious, and there’s been a noticeable increase in inventory,” said Austin Glanzer, co-founder of 717Homebuyers.com.

According to him, this influx of new listings, combined with a drop in buyer activity, has taken some of the heat out of the market.

“Homes are sitting longer, and sellers are starting to lower their prices to attract offers, which signals a shift toward a more balanced market,” he added.