While most Americans associate falling home prices with big cities, several smaller and midsized towns across the Sun Belt and the Delta region are experiencing steep housing market corrections. These areas were hit hard by pandemic-driven growth followed by oversupply, affordability strain, and economic softening. For homebuyers, investors, and locals, the declines bring opportunities but also risks. Here are eight towns where home values have slumped rapidly in 2025. Prices are dropping year‑over‑year, inventory is mounting, and conditions are giving buyers real leverage.
1. Cape Coral, Florida (-6.5% YoY)
Once a hot relocation market in 2023, Cape Coral has cooled significantly. Home values dipped 6.5 percent year‑over‑year through spring 2025, driven by booming new inventory and slowing migration. With average prices falling below $390,000, sellers are offering steep discounts to attract cautious buyers. Rising insurance premiums and climate risks have further dampened demand, especially among retirees weighing coastal exposure. The market now favors buyers despite golf courses and sunny weather. Inventory is still growing, which is quickly cooling this once-hot market.
2. Punta Gorda, Florida (-6.2% YoY)
Punta Gorda is among the hardest‑hit Florida metros, with a 6.2 percent year‑over‑year decline. Previously popular for retirees and remote workers, this coastal town is now facing oversupply, high insurance costs, and migration slowdown. Homes are staying on the market longer, and sellers are discounting aggressively. Some listings have remained active for months. Financial strain and market softness have made Punta Gorda an example of how quickly once “cheap” Paradise can reset, even though the community still has charm and access to the waterfront.
3. North Port, Florida (-4.3% YoY)
North Port, near Sarasota, posted a 4.3 percent drop in prices year‑over‑year, making it one of Florida’s most rapidly cooling markets. Once a top draw for affordable coastal living, the area is now correcting after overdevelopment and shifting housing demand. Rising insurance rates and slower new buyer activity have left more homes on the market than in recent years. Though still less expensive than major metros, price drops mean now could be the time for value buyers to enter a market that is becoming surprisingly flexible.
4. Austin, Texas (-3.4% YoY)
Austin led pandemic-era migration, but now its real estate bubble is deflating. Prices fell approximately 3.4 percent year‑over‑year, and projections point to deeper declines ahead, perhaps another 5.8 percent. High mortgage rates, slowed tech hiring, and rapid new construction are reversing the area’s growth momentum. Some neighborhoods are overbuilt, and affordability has become a major issue. For buyers and investors, current pricing reflects a turning tide. Austin’s reputation as a booming tech hub may remain intact, but the housing dial has shifted toward buyers.
5. San Antonio, Texas (-2.0% YoY)
San Antonio’s housing market declined by around 2.0 percent year‑over‑year in early 2025. While still more affordable than other Texas metros, demand has softened as growth outpaced local income. Oversupply, rising interest rates, and affordability challenges have increased buyer leverage. The city’s pipeline of new homes appears ample, reducing urgency and pricing power for sellers. If you’re looking for a central Texas market with room to negotiate and lower prices than the peak, San Antonio now offers one of the more stable softening trends in the Sun Belt.
6. Lake Charles, Louisiana (-2.7% YoY)
Lake Charles has seen housing prices fall by 2.7 percent over the past year, as energy sector weakness and regional economic strain weigh on the market. The city had surged during pandemic investments but is now correcting sharply. Inventory is elevated, and sellers are offering concessions to compete. Insurance and rebuilding costs after recent storms have also depressed demand. Homebuyers in Lake Charles now find more negotiating power than they would have a year ago, though recovery depends on job conditions in the energy and petrochemical industries.
7. Greenville, Mississippi (down 5.5% already in 2025)
Greenville is already seeing a 5.5 percent drop in home values in 2025, and the trend points toward continued decline. The Delta region faces economic hurdles, including low job growth and shrinking demand. Speculative buyers from the pandemic boom have pulled back, leaving an oversupplied market. Despite low entry prices, the risk here is high due to population decline and overall instability. While the numbers may attract investors hunting for bargains, anyone stepping in should do so with realistic expectations and a cautious approach.
8. Pecos, Texas (down 3.8% in 2025)
Pecos, a small East Texas town with an oil-heavy economy, has seen housing prices fall 3.8 percent in 2025 alone. Its real estate market remains sensitive to oil price fluctuations, and recent dips in demand have exposed oversupply from earlier growth bursts. Although prices remain low compared to national averages, the market’s volatility presents challenges for new buyers. It may look like a bargain on paper, but the uncertainty tied to the town’s economic reliance on energy could test even experienced investors.