Cities Where Housing Prices are Decreasing: Analysis and Trends

The COVID-19 pandemic brought about significant changes in migration patterns across the United States, with many Americans leaving big cities in favor of remote work opportunities in smaller towns. These towns, dubbed “Zoom towns” after the popular video conferencing platform, experienced a surge in population and housing demand during the height of the pandemic.

However, a few years post-pandemic, some of these once-booming locations are now facing a downturn in their housing markets. According to a recent report by Matthew Walsh, an economist at Moody’s Analytics, the national housing market remains overvalued, with prices exceeding their fundamental value by more than 12% in February. While this overvaluation is the lowest it has been since the spring of 2021, house prices have decreased in 17 states, with the Midwest showing the strongest performance due to more affordable housing prices.

Several cities that were previously hotspots for remote workers are now experiencing a decline in housing prices. Miami, Florida, which saw a rapid increase in housing prices, is now seeing a cooling off, with the median listing home price down -2.3% year-over-year. Provo, Utah, and Lake Havasu City, Arizona, are also projected to see negative annualized home price appreciation in the coming years.

Other cities where housing prices are decreasing include Oklahoma City, Oklahoma; San Antonio, Texas; San Jose, California; and Pocatello, Idaho. These cities are experiencing varying degrees of decline in housing prices, with some seeing year-over-year decreases in median listing home prices.

The shift in housing market trends in these once-thriving Zoom towns highlights the evolving landscape of remote work and its impact on real estate markets across the country. As more Americans continue to embrace remote work opportunities, the housing market in these cities may continue to fluctuate in the coming years.