The American housing market is going through a shift that many buyers have been waiting years to see. After prices skyrocketed during the pandemic years, some cities are finally starting to feel the weight of that excess. Not a crash, not a collapse – but a meaningful correction that could hand real leverage back to buyers for the first time in a long while.
Home price trends are expected to vary widely by metro area over the next 12 months. While prices will keep rising modestly in many parts of the country, some large housing markets are expected to see flat or declining prices, particularly across parts of the West and South. The question is: which cities specifically are on that list – and why? Let’s dive in.
1. Cape Coral–Fort Myers, Florida: The Sharpest Drop of All
Of all the cities on this list, Cape Coral–Fort Myers is the one making headlines for all the wrong reasons – if you’re a seller. Cape Coral–Fort Myers is expected to see prices fall roughly ten percent in 2026. The Wall Street Journal recently dubbed Cape Coral the “worst housing market in America,” with almost eight percent of owners owing more on their mortgages than the homes are worth.
Home values in Cape Coral soared by more than sixty percent from 2020 to 2022, creating an unsustainable price level that’s now correcting. Reduced buyer demand plays a major role. Higher mortgage rates have pushed many would-be buyers to the sidelines, shrinking the local pool of active shoppers.
Being on the Gulf Coast makes Cape Coral vulnerable to hurricanes and flooding. This leads to higher and harder-to-get homeowner’s insurance. Cape Coral has the third-highest premium-to-market ratio in the nation at roughly two percent, meaning a $350,000 home could cost around $7,700 annually in insurance alone. For buyers willing to navigate that, the deals right now are striking.
2. North Port–Sarasota–Bradenton, Florida: The Gulf Coast Correction Continues
Prices are expected to sink nearly nine percent in North Port–Sarasota–Bradenton during 2026. The good news is that as prices fall here, sales appear to be increasing. That’s a classic sign of a market finding its floor – not falling off a cliff.
North Port has seen an even more dramatic long-term correction, with typical August 2025 home sales prices twenty percent less than three years prior. Think about that for a second. A full fifth of peak-era value has already evaporated. These are markets that became overheated during the pandemic, facing a surge in demand that waned after prices shot through the roof and domestic migration to Florida slowed. A construction boom in the state has also created a glut of inventory, which is now pushing down prices.
3. Stockton–Lodi, California: California’s Quiet Price Slide
California doesn’t usually make lists about falling home prices. Stockton–Lodi is the exception. Values in Stockton–Lodi are expected to tumble by roughly four percent in 2026. Prices had already fallen around three percent as of late 2025, according to Realtor.com. That’s two years of consecutive decline in a state that rarely allows such things.
Among the top ten U.S. metropolitan areas where home prices are expected to fall the fastest in 2026, four are in Florida and three are in California, according to new analysis by Realtor.com. Stockton sits squarely in that California contingent. The city’s affordability problems are deep, and demand has simply not kept pace with the ambitious price levels set during the boom years. Buyers here finally have some room to breathe.
4. Raleigh, North Carolina: The Tech Hub Cooling Down
Raleigh was one of the hottest real estate destinations of the pandemic era. Remote workers, tech industry transplants, and investors flooded in. Raleigh home shoppers may find more bargains in 2026, as prices are estimated to slip by nearly four percent. Honestly, for a city that saw double-digit annual gains just a few years ago, this is a dramatic reversal.
Even if prices fall modestly, that won’t necessarily make them affordable. In recent years, home price growth has far outpaced income growth, according to The News and Observer. So while the direction is moving in buyers’ favor, it’s important to keep realistic expectations. Still, for anyone who was priced out of Raleigh in 2022 or 2023, this shift is worth watching closely.
5. Tampa–St. Petersburg–Clearwater, Florida: A Sunbelt Giant Softens
Tampa was a darling of the pandemic housing boom. People left expensive coastal cities and landed here in droves. The steepest price drops expected in Florida include the Tampa–St. Petersburg–Clearwater area at roughly minus three and a half percent. That figure might sound modest compared to Cape Coral, but on a market of Tampa’s size, it represents billions in value adjusting downward.
If weaker housing markets like Austin and Tampa continue to experience significant increases in active inventory, which has already risen above pre-pandemic levels in those areas, it could indicate further softening in those markets, creating opportunities for homebuyers and investors. Austin, Texas, and Tampa, Florida, led major metros with falling home prices in 2025. The pattern is clear and consistent – and it’s not done yet.
6. Deltona–Daytona Beach–Ormond Beach, Florida: Overlooked but Notable
This Florida metro doesn’t grab national headlines the way Tampa or Miami does. Yet it’s facing one of the more significant corrections on this entire list. Deltona–Daytona Beach–Ormond Beach is projected to see a price decline of around minus three and a half percent. A region that was once a quieter, more affordable alternative to Orlando has seen its prices balloon beyond what local incomes can realistically support.
Some markets will experience starker price corrections, especially those that became overheated during the pandemic homebuying frenzy, including many in the Sun Belt. Daytona Beach checks every box there. The pattern of pandemic-era over-appreciation followed by correction is playing out here just as it has across wider Florida – steadily, and with little sign of a quick reversal in the short term.
7. Denver, Colorado: A Different Kind of Decline
Denver’s story is a bit more nuanced than the Florida markets. Home prices in Denver are expected to stumble in 2026, falling by roughly three and a half percent. Home prices are already dipping and many sellers are pulling their listings off the market. However, experts do not expect a crash to follow.
The decline in Denver is partly attributed to an increase in multifamily housing within the metro area. These types of properties typically have lower price points, which can pull down the median home price even if overall values remain relatively stable. For many low-income households in Denver, renting is currently more affordable than buying. This dynamic reduces demand for entry-level homes and contributes to declining median prices. It’s a structural issue, not just a market cycle.
8. Spokane–Spokane Valley, Washington: A Slow and Expensive Market
Spokane quietly made the national radar during the pandemic as a cheaper alternative to Seattle. Prices surged, buyers came, and now the market is paying the price. Home prices in Spokane–Spokane Valley are expected to fall by three and a half percent in 2026. One local news report characterized the current market as “slow and expensive,” so a dip in price could get sales moving again.
The Spokane–Spokane Valley metro area in Washington faces a potential decline of minus three and a half percent, according to Realtor.com. The metros expected to experience the steepest drops in home price growth are largely clustered in coastal states. Spokane, sitting in eastern Washington, is an interior market showing that the correction isn’t just a coastal phenomenon. It followed the boom and now it’s following the bust.
9. Atlanta, Georgia: A Subtle but Real Shift
Atlanta doesn’t look like an obvious candidate for a price drop at first glance. The city has strong job growth and a growing population. Based on Zillow forecasts, Atlanta home values may decrease by about one and a half percent through mid-2026, contrasting with national modest gains of roughly one to two percent. Increased inventory, up about twenty-five percent year-over-year in core counties, will likely extend days on market.
According to data from the Atlanta REALTORS Association, in September 2025, the median sales price across the Metro Atlanta area was $411,000. That’s a number many local incomes simply can’t chase. Throughout 2025, the market transitioned to greater equilibrium as available inventory continued to grow, returning to levels seen prior to the pandemic. More choice for buyers means greater opportunity to negotiate and the ability to take more time before making a buying decision. Sellers will need to price with great precision. The sellers-call-the-shots era in Atlanta is quietly ending.
10. Sacramento–Roseville–Arden-Arcade, California: Northern California’s Pressure Point
Sacramento boomed during the pandemic as San Francisco Bay Area residents flooded in, chasing space and relative affordability. That demand wave has crested. Home prices are likely headed south in Sacramento–Roseville–Arden-Arcade, with a three percent decline projected for 2026. For a market that positioned itself as a budget-friendly escape from the Bay Area, even modest declines carry symbolic weight.
House prices are falling the most along the West Coast and Sun Belt, where there remains a glut of new homes following the pandemic-era construction boom. Supply is a key factor in areas where home prices decline. Sacramento fits that description almost perfectly. According to Zillow, Texas home prices are down roughly two and a half percent from a year ago, and Florida home prices are down about five percent. California isn’t immune from these forces – Sacramento is proof of that.
The Bigger Picture: What’s Driving These Declines?
It’s worth stepping back for a moment. None of these cities are collapsing. While at the national level home prices are expected to continue rising by roughly two percent year-over-year by the end of 2026, prices in twenty-two cities are forecast to fall. The cities on this list are outliers from a national trend that still points upward, just far more slowly than before.
The housing market has spent the past few years stuck with high prices and slow sales. In 2026, conditions are expected to ease slightly for buyers, a shift Redfin describes as a “reset” year. That reset is being driven by a growing supply of homes after years of limited inventory, which may push prices down in some markets.
After nearly doubling in the last decade, J.P. Morgan Global Research sees U.S. house prices stalling at zero percent nationally in 2026, with a slight improvement in demand likely offsetting any increased supply. For buyers who have been sitting on the sidelines for years, the window is opening – at least in these ten cities. Whether it stays open for long is the question worth asking yourself right now.
What do you think – are you surprised by which cities made the list? Share your thoughts in the comments.
Leave a Reply