These are the Most Vulnerable Housing Markets in America Right Now

INSURANCE
Several factors render these markets more vulnerable than others.
Updated Feb. 21, 2024
Fact checked
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One of the best money moves you can make is to save up for a home.

However, the real estate market has been volatile in recent years, meaning there are a lot of unpredictable factors folks have to consider.

One of them is where you purchase your property, as some markets are poised for a downturn. In these cities, populations and prices rose dramatically during the pandemic but could be in for (or are already experiencing) a major skid.

Here’s where.

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15. Orlando, Florida

Ajax9/Adobe Orlando, Florida skyline at Lake Eola

Coming in at No. 15 is Orlando, the first of several Florida cities on this list. Migration in the area was on the higher side in 2021, plus a higher percentage of properties in Orlando are second homes, 8.7%. The popularity might have been because people were able to pay their mortgages while taking advantage of lower interest rates.

There were also more house flips in Orlando in 2022 than average, which indicates vulnerability.

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14. Knoxville, Tennessee

Kevin Ruck/Adobe Knoxville Tennessee TN downtown drone skyline aerial

Knoxville takes the No. 14 spot in large part because migration to the area was high in 2021, with more than 4,500 new residents being added to the mix.

Prices grew steadily in early 2022, but they cooled later in the year, spelling potential trouble for those who bought in.

Residents also have a high home-loan-to-value ratio in Knoxville, as do all of the cities on this list.

13. Stockton, California

Matt Gush/Adobe downtown city center of Stockton

Stockton is not a place where a lot of people buy second homes, but its proximity to the pricey San Francisco Bay Area makes it a popular place for migration. That’s likely part of the reason property prices rose 19.3% throughout 2021.

Those prices cooled quickly in 2022, which isn’t good news for people looking to sell. This year, though, has shown prices back on the rise.

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12. Jacksonville, Florida

Kovcs/Adobe Jacksonville Florida USA downtown city skyline

In the northeast corner of Florida is Jacksonville, which gained over 4,000 new residents in 2021. New residents along with a higher-than-average rate of flips and vacation homes in the region drove real estate prices up a fair deal in 2021.

Though the surge in home prices continued in early 2022, the prices cooled over the second half of the year.

11. San Diego, California

Crown Point Design/Adobe San Diego California Padres Petco Park aerial

The gorgeous climate and location on the Pacific coast have made San Diego an extremely desirable place to live, historically driving up home prices. They increased by 17.5% in 2021, which is not an insignificant number.

However, property costs in the area dropped in 2022, with Jan. 2023 marking a 2.4% drop year over year. This is a concerning indicator for those who purchased in 2021.

10. Tucson, Arizona

SeanPavonePhoto/Adobe Tucson Arizona

This sunny desert city comes in at No. 10, where second homes and flips are much more common than in your average city. Housing prices jumped 21.5% throughout 2021, which is also higher than most other places.

Though these prices held on in early 2022, they came back down to earth by December.

9. Tampa, Florida

SeanPavonePhoto/Adobe Tampa Florida Skyline

This Florida city may be known for its famous football team, but its high rate of migration and insane pandemic housing prices are also notable.

In fact, the cost of buying a residence in Tampa grew more than almost any other U.S. city during the pandemic. At its peak in June 2022, prices were up 24.6% year over year. Prices have leveled out since.

8. Phoenix, Arizona

Kevin Ruck/Adobe Phoenix Arizona USA Downtown Skyline Aerial

Once dubbed one of the more affordable cities in the U.S., Phoenix saw one of the biggest population increases in the country in 2021.

Housing prices also skyrocketed from an average of $300,000 to $485,000 from May 2020 to May 2022, and that’s a lot. But prices have been on the slide since.

There are also many more flips in Phoenix than anywhere else on this list, which indicates vulnerability.

7. Bakersfield, California

Jacob/Adobe aerial view of downtown Bakersfield California skyline

This Southern California city has the highest home-loan-to-value ratio on this list, a solid indicator of risk if a recession hits. And though you won’t find a ton of vacation homes or flippers working in the city, migration is high here, which is not surprising in SoCal.

Real estate prices rose consistently from Jan. 2020 to May 2022. But since then, they have flattened out.

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6. Sacramento, California

John/Adobe Sacramento CA skyline

Sacramento is close enough to the San Francisco Bay Area to have its housing market seriously impacted by the regional migration in the area.

Real estate prices soared by a whopping 40% from May 2020 to May 2022 there, up to $610,000 per home on average.

They then fell faster than any other city on this list, which is bad news for folks who recently purchased property there.

5. Las Vegas, Nevada

marchello74/Adobe panorama wide angle view of the Las Vegas Strip

Housing costs in Las Vegas increased by 26.8% from May 2020 to May 2022, the third-highest increase of all cities in the U.S. Those prices then turned around and cooled dramatically for the rest of the year.

Couple those numbers with the astounding migration levels in Sin City (on par with Phoenix), and you can see real reason for concern.

4. North Port, Florida

Pauline/Adobe beach sunset

If you don’t live in the Sunshine State, you might never have heard of North Port before, but plenty of pandemic buyers swept in to raise home prices by 23.3% in 2021. Prices then chilled out in 2022 in this Gulf Coast city with higher-than-average migration.

What really sticks out about North Port is the fact that a fifth of all homes there are vacation homes, the second-highest number on this list.

3. Cape Coral, Florida

Info Creates/Adobe Cape Coral Florida with hotel and boats

Right around the corner to the south of North Port is Cape Coral. The stats for this city are very similar to its neighbor, although it does have the highest number of second homes on this list: 23.4%, a truly staggering amount.

The cost of residences also dropped harder in 2022 than it did in North Port.

2. Boise, Idaho

Rob/Adobe Boise Idaho - Capital of the Gem State sky

Boise occupies the No. 2 position, as property prices increased there by 30.9% in 2021, by far the highest number on this list.

Overwhelmingly, this was due to cash buyers from California pouring in to gobble up houses they could now work from.

That rush was short-lived, though, and prices plummeted on par with Stockton in 2022. As of March 2023, the decline has continued.

1. Riverside, California

Jacob/Adobe aerial view of the Los Angeles Suburb of Riverside California

The No. 1 most vulnerable housing market in America if a recession hits is Riverside, California, a Southern California city east of Los Angeles in the Inland Empire.

The primary reason for this is staggering migration levels — the highest on this list by far — as people flocked to the area during the pandemic.

People relocating from Los Angeles and San Francisco were the primary drivers of home price increases, which began their decline in 2022. If you're trying to get out of debt, investing in a home here might not be worth it.

Bottom line

Zoran Zeremski/Adobe young couple move into a new home

There are a variety of housing markets at risk that could see a downturn (or are already seeing one). Many of them are in Florida or California, where movement caused prices to soar and then, in some cases, plummet.

The real estate market can be volatile, to say the least, but if you consider buying property a smart way to build wealth for you now, just be sure to do your research before signing on the dotted line.

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Author Details

Cat Lafuente Cat Lafuente is a Florida-based writer and editor with extensive experience in digital and print content spaces. Her own personal finance journey — particularly consolidating debt and paying it off, in turn boosting her credit score and becoming a homeowner — inspired her to join the FinanceBuzz team; she hopes she can help others do the same.

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