Buyer’s Market Incoming? The 20 Cities Facing the Biggest Home Price Drops in 2025

The U.S. housing market is bracing for a shift, and not every city will feel it the same way. According to Zillow, home prices nationwide could slip about 1% over the next 12 months, but in some cities, the drop will be far more dramatic.

From pandemic-era overvaluation to high mortgage rates and rising insurance costs, multiple forces are pushing prices downward.

For buyers, that could mean rare bargains. For sellers, it may be a tough road ahead.

10 Small Cities Facing the Steepest Price Declines

Smaller markets tend to be more volatile, and these cities could see the sharpest drops:

• Greenville, MS – -16.7%

• Clarksdale, MS – -14.8%

• Pecos, TX – -13.7%

• Cleveland, MS – -13.6%

• Bennettsville, SC – -11.9%

• Opelousas, LA – -11.5%

• Raymondville, TX – -11.5%

• Hobbs, NM – -11.4%

• Morgan City, LA – -11.3%

• Indianola, MS – -10.8%

Factors like overbuilding, pandemic-driven investor speculation, and extreme weather risks (leading to soaring insurance costs) are hitting these markets hard.

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10 Major Metros Also Expected to Fall

While percentage drops are smaller, the high price tags in these cities mean big dollar declines:

• New Orleans, LA – -7.2%

• San Francisco, CA – -6.1%

• Austin, TX – -5.1%

• San Jose, CA – -4.0%

• Honolulu, HI – -3.8%

• Denver, CO – -3.8%

• Sacramento, CA – -3.7%

• San Antonio, TX – -3.6%

• Portland, OR – -3.5%

• Washington, D.C. – -3.3%

High interest rates have pushed many reluctant sellers into the market, leading to a 24.8% year-over-year jump in housing inventory  More supply + slower demand = downward price pressure.

Seller vs. Buyer: Who Gains, Who Loses?

Here’s the breakdown:

Sellers (Mostly Losing)

• Lower sale prices = reduced profit margins.

• More competition from other listings due to rising inventory.

• Tougher to find buyers willing to pay top dollar with rates near 7%.

• Higher insurance premiums scare away potential buyers in some regions.

Buyers (Mostly Gaining)

• More inventory to choose from, improving negotiation power.

• Price drops could mean thousands in savings, especially in smaller, hard-hit markets.

• Opportunity to buy in pricier metros at a rare discount.

• Less pressure to rush; market conditions favor patience. 

Why This Matters Now

If you’re a buyer, the next year could be your best chance in a while to negotiate a deal, especially in markets like Greenville, MS or New Orleans, LA.

If you’re a seller, consider pricing strategically, offering concessions, or waiting out the downturn if possible.

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