The U.S. housing market is showing signs of relief for buyers, as home prices drop in more than half of the largest metropolitan areas. According to the Realtor.com® September Housing Market Report, prices in some regions have declined by over 12%, marking a shift from the record highs of 2023.
“The median price of homes for sale this September dropped by 1% year-over-year, settling at $425,000,” reports Realtor.com economist Joel Berner. While the median price per square foot saw a slight increase, this signifies a growing availability of smaller, more affordable homes.
Key Markets Experiencing Price Declines
Several major cities across the country are experiencing a drop in median home prices, a welcome change for buyers facing years of affordability challenges. Florida cities, including Miami, Tampa, and Jacksonville, have seen noticeable price decreases after the real estate boom triggered by the COVID-19 pandemic. Factors such as an influx of new residents and robust home construction have driven these markets to cool down.
For instance, Miami experienced a 12.4% drop in its median list price, bringing it to $525,000. Meanwhile, Jacksonville and Tampa also saw declines of 6.1% and 5.5%, respectively.
Elsewhere, Midwestern and Western cities like Cincinnati, Kansas City, and Denver are also seeing substantial drops. Cincinnati’s median price fell 9.5%, and Kansas City’s declined by 8.4%. These changes reflect both economic factors and a shift in supply-demand dynamics.
Causes of Price Declines
The national trend of falling home prices has roots in multiple factors. For Florida, the pandemic-fueled remote work movement and an influx of new residents created a housing surge that has since leveled off. Builders, in response to the high demand, added more homes to the market, which in turn helped ease prices.
Additionally, other regions across the U.S., particularly in the Midwest and West, have seen fluctuating market conditions. In cities like San Francisco and Austin, where the cost of living remains high, the decrease in home prices signals a potential market correction.
Opportunities for Buyers
For buyers, this downturn presents an opportunity. While mortgage rates continue to rise, the decrease in home prices in these key markets offers some relief. This trend is especially beneficial for those looking to enter the market after years of soaring prices and fierce competition.
Among the cities seeing the biggest drops:
- Miami: Median list price of $525,000 (-12.4%)
- Cincinnati: Median list price of $337,000 (-9.5%)
- San Francisco: Median list price of $997,500 (-8.9%)
- Kansas City, MO: Median list price of $389,500 (-8.4%)
- Austin, TX: Median list price of $520,000 (-6.6%)
- Jacksonville, FL: Median list price of $399,000 (-6.1%)
- Denver: Median list price of $610,250 (-6%)
- Orlando, FL: Median list price of $429,950 (-5.6%)
- Tampa, FL: Median list price of $414,948 (-5.5%)
- Nashville, TN: Median list price of $547,865 (-5.4%)
Looking Forward: A Shifting Market Landscape
As home prices decline in these metro areas, the market appears to be favoring buyers in some of the most popular regions across the U.S. For those who have been waiting for the right time to enter the market, these price adjustments could provide much-needed opportunities. However, with mortgage rates continuing to fluctuate, buyers will need to act strategically to take advantage of these favorable conditions.
