Realtors Predict Home Prices in These 8 Cities Will Crash in the Next 5 Years

Buying a home is a significant financial investment. And while timing the market might not be a good idea, waiting for more affordable home prices could pay off in a big way. If you've been waiting to buy or sell, it's important to evaluate the situation and the potential for falling prices ahead.

This guide covers where housing prices might crash in the next five years, according to real estate agents.

Editor's note: All housing data comes from Zillow, unless otherwise stated.

Cape Coral, Florida

Average home value: $337,507

A recent rash of hurricanes that left a trail of damage in this Florida city put a strain on the market that Cape Coral still hasn't recovered from.

"Carrying costs have put this market over the edge," says Greg Field, solar home realtor at HomeSmart Realty Pros. "The cumulative burden of property insurance costs, HOA special assessments after storms, and excess inventory have slowed resales to a snail's pace."

Austin, Texas

Average home value: $504,148

At one point, Austin saw soaring home prices. But then builders stepped in to add more housing supply. As supply increases beyond what the market can support, home prices will likely fall.

"This market is dealing with structural supply overhang issues. Huge construction projects on the multifamily side as well as tract residential housing around submarkets gave the buyers too much choice," says Field.

New Orleans, Louisiana

Average home value: $245,144

The Crescent City has always offered a certain charm that keeps tourists coming back for years. But the realities of living in a flood-prone area may be catching up to New Orleans.

"The inability to insure the homes and pay the premiums at affordable rates is a structural problem that is crippling this market," says Field. "Policies are being canceled or not offered anymore, forcing people to use state-backed insurance as a last resort."

"No market can support prices if the buyers need to spend half their budget on insurance before paying the principal and interest on the home," says Field.

Youngstown, Ohio

Average home value: $71,210

A changing economic climate in Youngstown has set the stage for a housing market crash.

"Decades of manufacturing decline left aging housing and thin household finances, and that pressure has never fully cleared," says John Carter, founder of NestCash.

Cleveland, Ohio

Average home value: $116,759

Similar to Youngstown, Cleveland has seen rising mortgage delinquency rates and rising unemployment.

"The largest housing stock in Ohio sitting under real payment stress is a recipe for continued downward pressure in the weaker neighborhoods," says Carter.

Laredo, Texas

Average home value: $223,127

Laredo sits near the U.S./Mexico border. And with recent trade issues, it's not too surprising that the economy here is seeing some pressure. In fact, this city is seeing some of the highest foreclosure rates in the nation.

"As a border-trade economy, Laredo is unusually exposed to swings in cross-border commerce, and delinquency is the clearest early signal that foreclosures are coming," says Carter.

Port St. Lucie, Florida

Average home value: $386,756

During the pandemic years, many homebuyers chose to put down roots in Port St. Lucie. But as the job market softens, foreclosure rates are spiking in the area.

"Owners who bought or refinanced near the peak now carry payments sized to peak prices while the resale market has cooled, which is exactly the setup for price weakness if the pressure builds," says Carter.

Tampa, Florida

Average home value: $380,300

Tampa has experienced a lot of growth in recent years. But the high home prices might not last forever. And the costs surrounding homeownership in Florida are pushing many homeowners and potential buyers to the brink.

"It's not as much a conversation about purchase price and interest rates anymore," says Jake Kennedy, Realtor at Jake Sells Nashville. "Insurance, taxes, HOA fees, and maintenance costs are all radically changing the cost of owning a home."

Bottom line

Rising and falling home prices can impact both buyers and sellers. From a buyer's point of view, lower prices are obviously a win. But from a homeowner's perspective, changing home prices could affect home equity options, even if they have no plans to sell. Keeping tabs on the real estate market you're in can help you decide what's a good move for your situation.

This article is for informational purposes only and should not be considered investment advice.

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