A new Zillow report reveals that home prices are now falling in nearly half of America's biggest cities, as the anticipated spring housing rebound fails to materialise. Property values have declined year on year in 24 of the 50 largest metro areas, with some of the most significant drops occurring in pandemic boomtowns and once red-hot Sun Belt markets.
Austin Leads the Decline
Austin, Texas, suffered the steepest drop, with typical home values falling 6 percent from a year ago. It is followed by Dallas, Tampa, Denver, Orlando, and Las Vegas. Zillow noted that the spring bounce it had expected at the start of the year was 'put on pause' in April due to higher mortgage rates.
Warning Signs Beyond Prices
The warning signs are not confined to prices. Sales slipped 0.4 percent nationally from a year earlier, while new listings rose 2.1 percent. This means more homes are coming onto the market than buyers are purchasing. Zillow stated it was the first time this year that new listings had grown faster than sales on an annual basis. This trend gives buyers more choice and forces sellers to compete harder, especially in markets where inventory is already piling up.
In Seattle, typical home values fell 2.1 percent, while the number of homes for sale surged 25.9 percent. Sales there were also down 4.4 percent from a year earlier. In Las Vegas, prices dropped 3 percent as sales fell 7 percent, while Atlanta saw home values fall 2.2 percent and sales drop 5.7 percent.
Austin's Repricing Story
Austin tells a slightly different story. The Texas capital, once one of America's most dynamic pandemic boomtowns, experienced the steepest price fall in the country, but sales jumped 18 percent. This suggests Austin is not simply frozen; it is repricing. Buyers are returning, but only after sellers accept painful discounts.
National Market Loses Momentum
Zillow's national numbers show a market that has lost momentum just as it was supposed to be heating up. There were 1.3 million homes for sale across the US in April, up 3.7 percent from a year earlier. New listings rose to 426,356, up 2.1 percent year on year and 10.7 percent from March. However, sales did not keep pace. Zillow's preliminary count showed 323,631 homes sold in April, down 0.4 percent from a year earlier. Homes are also taking longer to sell, with the typical listing going pending in 17 days in April, one day longer than last year. Nearly a quarter of sellers cut their asking price, with 23.5 percent of listings on Zillow showing a price reduction.
Regional Concentration of Price Falls
The price declines are heavily concentrated in the same places that boomed when remote workers and retirees chased cheaper homes, more space, and warmer weather during the pandemic. In Florida, values fell 3.2 percent in Tampa, 3 percent in Orlando, 2.8 percent in Miami, and 1.6 percent in Jacksonville. In Texas, Austin was down 6 percent, Dallas fell 3.3 percent, Houston dropped 2 percent, and San Antonio slipped 1.9 percent. In the West, prices fell 2.2 percent in San Jose, 2.1 percent in Seattle, 1.8 percent in Phoenix, 1.6 percent in Sacramento, 1.1 percent in Riverside, 1 percent in Portland, and 0.9 percent in San Francisco and San Diego.
Market Power Shift
Chief economist Darl Fairweather at Redfin told the Daily Mail, 'Many of the markets seeing the biggest home-price declines today were pandemic boomtowns where demand surged unsustainably during the remote-work era.' Redfin's data points to a broader shift in market power, with 630,000 more sellers than buyers nationwide, the largest gap the company has recorded since 2013. The imbalance is especially pronounced in Sun Belt markets such as Austin, Nashville, and Miami. Fairweather added, 'While this gap has recently been slightly shrinking, it's still affecting prices. These areas saw a huge influx of buyers during the pandemic, but now demand has slowed while inventory has grown, leading to price corrections in markets where home values rose the fastest.'
Contrasting Trends in Midwest and Northeast
Milwaukee posted the biggest annual price gain in the table, up 5.3 percent. Hartford was up 5.2 percent, Buffalo 4.8 percent, Chicago 4.4 percent, and Cleveland 4.3 percent. This divide shows a housing market splitting in two: expensive pandemic darlings are wobbling, while cheaper Midwest and Northeast markets are still attracting buyers priced out elsewhere.
