5 Cities Where Home Prices Could Soon Decline—and What It Means for You

1. Provo, Utah: The Top Market at Risk

Median List Price: $566,375
Year-Over-Year Change: Down 1.4%

Provo’s robust growth in recent years is catching up with it. Demand soared during the pandemic as remote workers sought scenic, less-crowded locales, sending prices surging by about 38% from January 2020. Yet with those buyers now pausing or looking elsewhere, Provo could experience the steepest decline of the five high-risk metros.

Why It’s Changing:

• Rapid price appreciation has outpaced local incomes.
• Inventory is rising as buyer demand cools.

2. Tucson, Arizona: Slight Dip Amid a Post-Boom Reset

Median List Price Change (YoY): Down 1.9%

Similar to Provo, Tucson saw a huge upswing in popularity among out-of-state buyers looking for warmer climates. However, mortgage rate hikes, plus cost-of-living adjustments, mean the market is taking a slight step back.

Why It’s Changing:

• The Sun Belt real estate boom is leveling off.
• Higher mortgage rates are limiting buyers’ budgets.

3. Albuquerque, New Mexico: From Hidden Gem to Cooling Market

Once considered a “hidden gem” for affordability and scenic beauty, Albuquerque’s real estate market heated up during the remote-work wave. Now, CoreLogic’s data indicates it could see a modest dip, though likely not a crash.

Why It’s Changing:

• Increased supply is offering buyers more options.
• Local economic factors and higher borrowing costs dampen demand.

4. Phoenix, Arizona: Readjusting After a Fast Ascent

Phoenix’s reputation as an affordable city with plentiful sunshine drove its market into overdrive throughout 2021 and 2022. CoreLogic projects it’s at high risk of a price drop this year.

Why It’s Changing:

• Steep price increases have priced out many first-time buyers.
• More listings and slower sales lead to more competitive pricing.

5. West Palm Beach, Florida: Largest Year-Over-Year Decline

Median List Price Change (YoY): Down about 10%

Of the five cities, West Palm Beach shows the biggest year-over-year price drop. The area exploded in popularity among remote workers and retirees, but it appears to be recalibrating in the face of elevated mortgage rates and buyers’ shifting preferences.

Why It’s Changing:

• Rapid pandemic-era growth is leveling off.
• Higher insurance and property tax costs may deter some buyers.

The Broader Market Picture

Despite these localized declines, CoreLogic expects national home prices to keep climbing, around 4.1% through the end of 2025—similar to many industry forecasts. Mortgage rates hovering around 7% and the Federal Reserve’s pause on interest rate cuts suggest it won’t be the frenzy of 2021 or 2022, but homeownership remains a key goal for many Americans.

What It Means for Buyers

• Opportunities in Correcting Markets: If you’ve had your eye on one of these five cities, a dip in prices might open doors that were previously shut.
• Mind the Mortgage Rates: Even if homes cost less, higher interest rates can offset some of those savings. Consider shopping around for better financing options.

What It Means for Sellers

• Price Strategically: These aren’t the days when just any listing flies off the market. Work with a knowledgeable real estate agent who understands local comps and buyer demand.
• Consider Timing and Upgrades: If you can hold off until the market stabilizes, that might work in your favor. If not, small improvements—like fresh paint or updated fixtures—may help your home stand out.

Final Thoughts

The U.S. housing market is expected to keep trending upward overall, but not uniformly. If you’re buying or selling in Provo, Tucson, Albuquerque, Phoenix, or West Palm Beach, pay extra attention to local market conditions, mortgage rates, and your own financial situation. A dip in home prices isn’t necessarily a disaster; it’s part of the normal ebb and flow that defines real estate cycles. With the right strategy and the right professional guidance, you can navigate this cooling spell to your advantage.

Stay informed, be flexible, and remember—real estate decisions often hinge as much on personal circumstances as they do on economic trends.