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- 7 Cities With Homes Expected To Plummet in Value in the Second Half of 2025</p>
<p>Emily FowlerJuly 6, 2025 at 3:00 PM</p>
<p>Nicolas McComber / iStock.com</p>
<p>The U.S. housing market is entering a new chapter. With pandemic-era booms in the rearview mirror, several cities are staring down a sharp market correction. Overbuilding, interest rate sensitivity and shifting migration patterns are dragging values down fast, and some metros are more vulnerable than others.</p>
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<p>San Francisco, California</p>
<p>The Bay Area's decline isn't over. Tech layoffs, cost-of-living pressures and the region's long-running affordability crisis continue to drive people out.</p>
<p>"Practically the whole state has experienced out-migration, but none of the local markets, especially large metros, are as affected as the Bay Area," said Peter Evering of Utopia Management. "We're already seeing the most significant drops that we can expect to happen in this part of the country, and I think this will continue."</p>
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<p>Austin, Texas</p>
<p>Prices in Austin surged during the pandemic, but higher interest rates and stretched affordability have flipped the script.</p>
<p>Daniel Cabrera, CEO of Fire Damage House Buyer, flagged Austin as a market "more susceptible to sharp corrections" due to "affordability barriers and higher mortgage rates" that are now pushing demand down hard.</p>
<p>Phoenix, Arizona</p>
<p>Phoenix is showing signs of a market correction, driven by imbalances created during its construction surge that has, according to Cabrera, "outbalanced demand, potentially resulting in oversupply and subsequent price corrections." As inventory stacks up and demand cools, the pressure on home values is growing.</p>
<p>Tampa, Florida</p>
<p>Tampa's growth wave has crested.</p>
<p>"They've done a pretty good job at increasing their housing inventory, and simultaneously there is a bit less interest," said Adam Hamilton, CEO of REI Hub. "Both of these elements are making the supply/demand ratio become less extreme, allowing home values to decline."</p>
<p>The drop-off is already underway and could accelerate through year-end.</p>
<p>Boise, Idaho</p>
<p>Boise saw steep pandemic-era price jumps, driven by remote workers relocating there from more expensive cities. Now, the combination of high mortgage rates, shrinking migration and affordability concerns are reversing those gains. With demand thinning and sellers still holding out for high prices, the correction may deepen.</p>
<p>Las Vegas, Nevada</p>
<p>Tourism bounced back, but Vegas housing hasn't kept pace. After a construction boom, the metro now faces too many new builds and not enough buyers. Like Phoenix, the imbalance is putting downward pressure on prices. Cabrera warned that markets like Vegas could see continued declines as oversupply becomes harder to ignore.</p>
<p>Denver, Colorado</p>
<p>Once a magnet for transplants, Denver is now losing momentum. Migration into the state is cooling and economic growth has slowed. Homes are sitting longer, and discounts are becoming more common. Cabrera points to large portions of Colorado as areas where "falling migration patterns" could increase value pressure.</p>
<p>What's Driving the Dip?</p>
<p>Experts agree the biggest risks lie in cities that grew too fast or depended too heavily on one sector.</p>
<p>"Cities that are single-industry-dominated, like oil fields or technology hubs, are susceptible to disproportionate home value declines should those industries slump," said Cabrera.</p>
<p>Add in the Federal Reserve's rate policy, persistent affordability issues and softening demand, and it's clear that some local markets are in for a rocky ride.</p>
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<p>This article originally appeared on GOBankingRates.com: 7 Cities With Homes Expected To Plummet in Value in the Second Half of 2025</p>
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