Realtors Predict These 8 Cities Will See Price Drops by End of 2026

After years of housing prices climbing, price drops might be on the horizon for some popular markets. In Realtor.com's 2026 Housing Forecast, several cities across the Southeast and West are on a course for lower home prices. The downward price trend can be partially explained by the fact that pandemic-era demand has continued normalizing as inventory expands.

We talked to several real estate agents about where they predict falling home prices by the end of the year. Is this the right time for you to make a smart homeowner move?

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

Naples, Florida

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Average home price: $549,494

Rising insurance costs across the Sunshine State are making homeownership more expensive. Naples has long been a retirement haven. But the rising costs don't fit into most retirement plans.

According to Ryan Dossey, real estate agent and co-founder of SoldFast, "Since insurance costs can change so fast, and a lot of buyers are older/on fixed incomes, the math is pricing them out very quickly."

San Francisco, California

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Average home price: $1,369,171

It's no secret that home prices are high in San Francisco, making it difficult for many to break into the housing market. "San Francisco remains stuck in 'slow bleed' correction territory, though I see signs of stabilization," says Blaz Korosec, licensed realtor and founder of Investorade.

On the ground, Korosec is seeing condo prices drop by 25% to 30%, pointing toward a larger market correction coming down the pipe.

Cape Coral, Florida

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Average home price: $339,638

Cape Coral sits on the southwest side of Florida. With miles of canals, it offers seemingly endless opportunities for waterfront living. The catch is that rising home insurance prices are putting pressure on homeowners.

"Rates in Florida have been growing quickly due to the high risk of natural disasters, particularly hurricanes and flooding," says Omer Reiner, realtor and president of FL Cash Home Buyers, LLC.

Reiner continues, "Paired with high property taxes, homes have been sitting on the market much longer, and with the current economy, people are hesitant to make such a major investment."

Omaha, Nebraska

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Average home price: $297,017

Solidly in the Midwest, most might not expect housing prices to fall in the relatively affordable Omaha. But according to Wyatt Simon, owner of Omaha Home Advisors, falling prices might be on the horizon.

"With higher property taxes, expensive insurance premiums, and high interest rates, the buying power of consumers is being squeezed," says Simon.

As more potential home buyers stay out of the market, falling demand will likely push sellers to lower their asking prices.

Aurora, Colorado

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Average home price: $464,881

During the pandemic years, people flocked to the breathtaking natural beauty of Colorado, including cities like Aurora. But with higher interest rates, among other factors, the market may be poised to cool here. 

According to Brett Johnson, real estate investor and owner of New Era Home Buyers, "A lot of sellers still seem anchored to 2021 and early 2022 pricing, even though the math for buyers looks completely different today."

"What really stands out to me is how much monthly payments have changed buyer behavior, even more than home prices themselves," says Johnson, "A property that would have pulled in ten offers a few years ago may now sit for several weeks unless it is priced very aggressively."

Tampa, Florida

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Average home price: $376,530

On the west coast of Florida, many can find a lot to love about living in Tampa. But a few things people tend to dislike include the rising home insurance prices and the threat of damaging hurricanes. With insurance prices rising so quickly, many homeowners and prospective buyers have been caught off guard.

"That changes affordability fast, and buyers are finally starting to factor those carrying costs into offers," says Andrew Gardner, founder of Sell to Leap, a real estate company in the Houston area.

Boise, Idaho

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Average home price: $504,894

During the pandemic years, Boise was a popular destination for remote workers seeking easier access to natural beauty. As people flocked to the city with high incomes, the influx pushed housing prices higher. But with fewer people moving to the city, the market may readjust to better match local wages.

"Once migration slows, markets like that can reprice pretty quickly because there is not enough organic local demand supporting the higher valuations," says Gardner.

Houston, Texas

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Average home price: $265,062

With a robust economy featuring a wide range of jobs and relatively affordable housing, you might be surprised to see Houston in this list. But certain parts of the city might see housing prices drop in the near term.

Specifically, "areas that saw aggressive speculative building or long commuter growth during the remote-work era could see price pressure if energy slows down or return-to-office trends continue," says Gardner.

Bottom line

For anyone planning a major move this year, especially retirees seeking refuge in a lower cost-of-living area, falling home prices could be a blessing. But simply choosing a new place to call home based on home prices alone might be a recipe for disaster.

Before committing to a move, consider visiting the city for at least a week or two to make sure you could see yourself enjoying it for the long term. If you can't, consider other ways to make ends meet in retirement, like remote work or even a part-time job.