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Realtors Predict These 8 Housing Markets Will See Price Drops in 2026

Realtors share where home values may fall. Is this an opportunity for you?

By Sarah Sharkey

Edited by Sara Albertelli

Updated Jan. 1, 2026

The housing market has seen home prices climb in recent years. But some markets are poised for a major adjustment with dropping prices, according to some real estate agents. As the markets shift, it might be the right time to make money moves.

This guide explores several locations where real estate agents foresee falling prices.

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Austin, Texas

As the self-proclaimed capital of live music, Austin has drawn in a crowd. But the surge in interest led to a surge in housing costs during the pandemic.

"There was a mass exodus to Austin following the pandemic, which led to a surge in new housing developments," says Abigail Godfrey, a real estate agent at Coldwell Banker Warburg, "This was great for those tired of paying for big city living, seeking a smaller-town vibe that still had a lot going on."

But with apartment construction rates sky-high, supply is beginning to meet housing demand in Austin.

"Every bubble eventually pops, and I do believe we will see prices drop in Austin during 2026," said Godfrey.

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Boise, Idaho

Boise was another pandemic hotspot. Many flocked to this outdoor oasis when remote work became the norm. But with return-to-office mandates coming out, not everyone may be able to stay.

"The market became extremely overvalued compared to what local incomes can afford," says Andrew Fortune, real estate agent and owner of Great Colorado Homes.

Fortune continues, "They also have a lot of new construction inventory that builders need to move quickly. That means they are using large incentives which pulls all existing home prices down."

Raleigh, North Carolina

Like Austin and Boise, Raleigh saw an influx of people during the remote-work days of the pandemic. Its proximity to nearby mountains, ample outdoor activities, and robust downtown continue to make it an attractive place to call home. But the housing market may see a bit of a downturn, according to Fortune.

"I predict a noticeable decline because inventory is starting to expand quite a bit. Price growth has slowed, making sales prices more affordable for buyers," says Fortune.

Fortune continues, "This market saw a huge frenzy during the shift to remote work and is now coming back to earth."

Cape Coral, Florida

Nestled along the Southwestern Gulf Coast of Florida, Cape Coral is a popular retirement spot. But a rash of hurricanes in recent years, including extensive flooding from Hurricane Ian, has caused many residents to reevaluate whether or not they want to continue living here. Beyond the threat of hurricanes, insurance premiums in the city have skyrocketed, in large part due to the possibility of natural disasters.

As some residents decide to pack up and leave, inventory has flooded the market. "Sellers who need to move may be forced to accept a loss on their home sale," says Fortune.

Tampa, Florida

Nearby Tampa is facing similar problems to Cape Coral. With rising insurance costs and the threat of hurricane season, many would-be buyers are skeptical about moving to the area.

"Higher insurance costs, rising property taxes, and a generally higher cost of living are all making buyers think twice, even as more homes come up for sale," says Carla Gericke, a real estate agent at Porcupine Real Estate in New Hampshire.

Phoenix, Arizona

Phoenix has seen extensive growth in recent years, with demand from new residents pushing housing prices higher. But this sunny spot might see a cooling market in the New Year.

"With prices already high and mortgage rates no longer at historic lows, buyer enthusiasm has dulled and sellers have less leverage than before," says Gericke.

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Seattle, Washington

The rainy city of Seattle offers a tough climate, with an average of 150 days of rain each year, and some aren't willing to stick around. As Washington's population growth slows, demand for homes in this major West Coast city might fall.

"We have seen such a shift in our society to value mental health over anything, so perhaps this gloom has finally caught up with people," says Godfrey. "There has been a trend of individuals moving from Seattle to a sunnier Sequim, Washington."

Los Angeles, California

Los Angeles has drawn in a crowd of dreamers for decades. While many still flock to this city of angels, it's undeniable that the cost of living in the area is sky high. For many, it's too high to manage.

"People are finding it hard to keep up with the increased cost of living while wages stay the same," says Godfrey.

Although Godfrey says, "Los Angeles is unlikely to be considered an 'affordable' city," it's possible that housing prices could dip in the coming year due to many wanting to relocate because of the high cost of living.

Bottom line

The housing market might see significant changes in 2026. If you've been waiting for home prices to fall, that wish might become a reality in some markets next year. But unknown factors, like future mortgage rate drops and increased competition, could throw these predictions off track, so it is essential to stay up to date with the latest changes.

For those getting ready to buy a home, focus on building up your own financial situation to prepare yourself financially for the major purchase, whether or not price drops become a reality.

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