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Are some housing markets on the brink of collapse in 2025?
As an investor, it’s important to avoid markets on a downward spiral.
We’ve identified 12 locations where home prices are set to crash this year. Read on to find out why these markets are facing steep declines and how to plan your next move wisely.
This article gives you valuable insights, but remember, it’s not and will never be investment advice. We pull data from a range of sources to provide you with the most accurate picture possible, yet we can’t guarantee complete accuracy. Markets are difficult to predict. Make sure to do your own research and consult a professional before making any financial moves. Any risks or losses are your own responsibility.
1) Phoenix - the bubble begins to deflate as population growth slows to 1%
Phoenix’s housing market is showing clear signs of trouble. The inventory of unsold homes has climbed 20% year-over-year, creating intense competition among sellers.
With fewer buyers in the market, homes are sitting unsold longer, and sellers are often forced to lower their prices just to close a deal.
At the same time, population growth has dropped to 1% in 2024, down from 2.5% in prior years. This sharp decline means there are simply not enough buyers to meet the supply of homes for sale.
To make matters worse, mortgage delinquency rates in Phoenix have risen by 1.8% year-over-year, a sign that existing homeowners are struggling to keep up with payments.
This adds to the overall instability of the market and increases the likelihood of forced sales or foreclosures
Sources: World Population Review, United States Census Bureau, Redfin, Macro Trends , National Mortgage Professional
This infographic we have made will show you what are the cheapest and the most expensive real estate markets in the U.S. in 2025
2) Lake Charles - the slow recovery from the hurricanes leaves 8% unemployment
Lake Charles is facing a tough housing market as it struggles to recover from recent hurricanes.
Unemployment remains at 8%, much higher than the national average, making it harder for many residents to afford homes or even stay in the area.
The rebuilding process has been slow, and many residents haven’t returned, leaving the population smaller than it was before the storms.
With fewer people living in the area, housing demand has taken a hit, making it difficult for sellers to find buyers.
Adding to the challenge, the number of unsold homes has risen by 12% this year, forcing sellers to compete for a shrinking pool of buyers. Rows of empty homes are now a common sight, showing just how much the housing market is struggling to bounce back.
Sources: U.S. Bureau of Labor Statistics, Redfin, Federal Reserve Economic Data, U.S. Department of Housing and Urban Development, Trading Economics
3) Houma - the housing market has been shaken by 15% oil job losses
Houma’s housing market is under serious pressure as home sales have dropped by 10% year-over-year, leaving many properties sitting unsold for longer periods.
At the same time, the housing inventory has risen by 12%, creating an oversupply that is forcing sellers to compete for a shrinking pool of buyers.
A major reason for this is the local economy’s reliance on the oil industry. Oil sector employment fell by 15% in 2024, causing many workers to leave the area in search of jobs.
With the population shrinking and demand for homes decreasing, sellers are struggling to attract offers.
To stay competitive, many sellers are now cutting prices, while empty homes continue to sit on the market longer than ever before.
Sources: Federal Reserve Economic Data, Redfin, U.S. Bureau of Labor Statistics, Deloitte , U.S.News
4) Provo-Orem - overbuilt and decreasing demand
Provo-Orem’s housing market is struggling with too many rentals and not enough tenants.
Landlords are seeing a 10% jump in vacant properties, and many new apartment complexes are sitting empty.
This oversupply is making it tougher for property owners to fill their units, and it’s starting to drag the market down.
Part of the problem is the 5% drop in university enrollment in 2024. Fewer students mean fewer renters, which has left the rental market in a tough spot.
On top of that, home sales in the area are down 7% compared to last year, and homes are staying on the market longer.
Sources: Redfin, U.S.Bureau of Labor Statisftics, The U.S. Census Bureau, U.S. Department of Housing and Urban Development
Our team has made this infographic to show the U.S. real estate markets with the highest and lowest value growth over the past decade, which is useful if you’re considering investing in American real estate.
5) Austin’s - $500K homes are at risk as remote work fades
Austin has been the star of Texas real estate, with prices rising 10% in 2024.
However, the median home price of $500,000 is now far beyond what most local residents can afford, drastically reducing affordability and shrinking the pool of potential buyers.
At the same time, housing inventory has increased by 15% in 2024, while sales volumes have dropped by 8%, leaving sellers with more competition and fewer buyers.
This imbalance is already pushing some sellers to lower prices to close deals.
Adding to the pressure, companies are calling employees back to the office, meaning fewer people are relocating to Austin for flexible work opportunities. This slowdown in high-income relocations has left sellers struggling to find enough demand to sustain prices.
Sources: Redfin, Austin Board of Realtors, The Wall Street Journal, West Austin Properties, Time
- Why are Austin’s falling home prices in 2025 a win for buyers?
6) Boise - the housing market is slowing down with a 10% drop in tech jobs
The vacancy rate in Boise has climbed to over 8%, a clear sign that developers may have overbuilt.
With too many properties and not enough renters, homes and apartments are sitting empty longer than before.
Adding to the pressure, Boise’s tech sector, which fueled much of its economic growth, suffered a 10% job loss in 2024.
This has cut off a major source of housing demand, as many workers who drive home purchases and rentals have left the area.
On top of that, home price growth has stagnated, with only a 1.5% increase in 2024, down from double-digit growth in previous years.
Sources: The Wall Street Journal, Zillow , Statista , Norada Real Estate Investments, U.S.News
7) Atlanta - suburbs struggle with a 25% rise in new construction
Atlanta’s suburbs are starting to feel the strain of too much building and not enough buyers.
A 25% jump in new construction permits in 2024 has added a flood of new homes to the market, but population growth has stayed flat at just 1.5%. That’s nowhere near enough to match the pace of construction.
With more homes than buyers, the inventory of unsold properties keeps climbing, and sellers are feeling the heat.
Many are already lowering their prices to try to attract buyers in this oversupplied market.
To make matters worse, mortgage applications in the area dropped by 12% in 2024, showing that fewer people are even looking to buy. Too many homes and fewer buyers spell trouble for Atlanta’s outer suburbs.
Sources: City of Atlanta, GA, World Population Review, Neilsberg, Atlanta Regional Commission
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8) Dallas - job growth slows to 1.2% in 2024
The Dallas housing market faces a potential crash, with affordability rapidly deteriorating.
The median home price surged to $407,000 as of December 2023, a dramatic 19.7% year-over-year increase, while mortgage rates climbed to 6.5% in 2024 compared to 4.8% in 2023. These rising costs make homes increasingly difficult to finance, sharply reducing buyer affordability.
Compounding this issue, job growth in Dallas has slowed significantly, with employment rates rising just 1.2% in 2024, down from 2.5% the previous year.
Slower job growth reduces financial security, shrinking the buyer pool as fewer new residents move to the area and existing residents hesitate to buy homes.
With fewer buyers able to afford homes, sellers are forced to lower prices to attract interest. Combined with declining demand and rising borrowing costs, these pressures suggest the Dallas housing market is on shaky ground, with a potential downturn looming.
Sources: Forbes, J.P. Morgan , Real Wealth
- Why Dallas' real estate market is cooling off in 2025
9) San Antonio - $302K homes clash with $55K incomes
The median home price in San Antonio is $302,500, while the median household income is only $55,000, leaving many homes out of reach for locals.
This affordability gap has reduced the number of buyers in the market, leaving sellers to lower prices to attract offers.
On top of that, mortgage rates for a 30-year loan have risen to 6.4% as of August 2024, making monthly payments even more expensive and further reducing the number of buyers who can afford a home.
San Antonio’s rapid growth is also creating serious challenges. The city’s population grew by 22,000 people from 2022 to 2023, a 1.5% increase, making it the fastest-growing large city in the U.S.
And to make matters worse, the city’s infrastructure is struggling to keep up, creating additional barriers for new residents.
Sources: Redfin, Realtors, Zillow, The Texas Tribune, American Enterprise Institure
- Here is why San Antonio housing prices might fall in 2025
10) Gainesville - rental vacancies climb to 12%, leaving landlords in trouble
Gainesville has seen a significant increase in rental properties, but the rental vacancy rate rose to 12% in 2024, up from 7% last year.
A rental vacancy rate shows the percentage of empty rental units available in the market. A higher rate, like 12%, means many apartments are sitting empty because there aren’t enough renters to fill them.
This extra supply is causing rents to go down, making investors rethink building more apartments. At the same time, homebuyers are holding back as median household incomes remain too low to cover rising housing costs.
In October 2024, the median sale price of homes in Gainesville was $258,150, reflecting a slight decrease of 0.71% compared to the previous year. Homes are also taking longer to sell, averaging 62 days on the market in October 2024, compared to just 28 days the previous year.
With fewer renters, hesitant buyers, and more homes staying on the market, the local housing market is slowing down. These signs of oversupply, declining demand, and affordability pressures are making some experts question whether Gainesville could be headed for a potential housing crash.
Sources: Statista, Redfin, Forbes, The U.S. Census Bureau, Zillow
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11) Salt Lake City - more and more home for salles and buyers can't afford
Salt Lake City’s housing market is starting to feel the pressure. The number of homes for sale has jumped by 20%, as sellers struggle to find buyers who can afford their prices.
At the same time, prices are starting to drop, a big change for a city where homes used to sell in just days.
One major reason is rising borrowing costs. Mortgage rates hit 5% in 2024, making monthly payments much more expensive and keeping many families from buying homes.
On top of that, home sales are down 12% compared to last year, which means fewer buyers are in the market.
With more homes sitting unsold and fewer buyers, Salt Lake City’s housing market is feeling the squeeze like never before.
Sources: Redfin, Realtor, Norada Real Estate Investments, Zillow
12) Palm Bay - the housing market slows as median age hits 47
In Palm Bay-Melbourne-Titusville, home sales have dropped by 10% compared to last year, while the number of homes for sale has risen by 15%.
This sharp increase in available homes is making it harder for sellers to find buyers, and many properties are sitting on the market longer than before.
A big factor is the area’s aging population. With a median age of 47, many older homeowners are downsizing or moving into senior living.
This is therefore reducing the demand for single-family homes and adding to the oversupply.
Driving through the area, you’ll notice more “For Sale” signs than moving trucks, a clear sign of oversupply.
Sources: Redfin, U.S. Department of Housing and Urban Development, Data USA, The U.S. Census Bureau, Florida Demographics
- Where will U.S. home prices explode in 2025?
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So, are home prices set to crash somewhere in the US in 2025? Yes!
In 2025, several housing markets are poised for a significant downturn. The reasons are varied but interconnected, ranging from economic shifts to demographic changes.
For instance, Phoenix is experiencing a slowdown in population growth, now at just 1%, which is insufficient to absorb the 20% increase in unsold homes. This imbalance is forcing sellers to lower prices. Similarly, Lake Charles is grappling with an 8% unemployment rate post-hurricanes, leading to a 12% rise in unsold homes and a shrinking buyer pool.
In Houma, a 15% drop in oil jobs has led to a 10% decrease in home sales, while Provo-Orem faces an oversupply of rentals due to a 5% drop in university enrollment. Meanwhile, Austin is seeing a decline in demand as remote work opportunities fade, despite a 10% price increase in 2024.
Other areas like Boise and Atlanta are dealing with overbuilding and insufficient demand, with Boise's tech job losses at 10% and Atlanta's new construction permits up by 25%. Dallas and San Antonio are struggling with affordability issues, as median home prices soar beyond local incomes.
In Gainesville, rental vacancies have climbed to 12%, and Salt Lake City is seeing a 20% increase in homes for sale with fewer buyers. Lastly, Palm Bay is facing an aging population, reducing demand for single-family homes.
These factors collectively indicate that these 12 locations are on the brink of a housing market crash in 2025, driven by economic, demographic, and market-specific challenges.