Housing markets can’t stay hot forever, and these cities are feeling the pressure.
Real estate markets go through cycles—booms, busts, and everything in between. While some cities have seen years of rapid growth, rising home prices don’t always mean long-term stability. In fact, when prices rise too fast compared to wages and demand slows down, a crash becomes more likely. Homebuyers who jumped in at the peak may soon find themselves underwater, while investors banking on endless appreciation could be in for a rude awakening.
Some U.S. cities are already showing signs of an impending downturn, with slowing sales, rising inventory, and affordability slipping out of reach. While no one can predict exactly when a crash will hit, these 11 cities have all the warning signs.
If you’re thinking about buying or selling in one of these markets, pay close attention—things might get messy.
1. Austin’s home prices skyrocketed, but demand is fading fast.
For years, Austin was one of the hottest real estate markets in the country, drawing in tech workers, startups, and out-of-state investors looking to cash in. But when home prices doubled in just a few years, affordability became a serious issue, as reported by Gabrielle Cruz-Martinez of Yahoo. Now, with higher mortgage rates and fewer buyers in the market, Austin’s real estate boom is running out of steam.
Homes that once sold in days are now sitting on the market for weeks, and price reductions are becoming more common. Investors who overpaid for properties expecting continued appreciation may soon find themselves in trouble. If demand keeps dropping and more inventory piles up, Austin’s housing bubble could deflate quickly.
2. Boise’s rapid growth has left it vulnerable to a major correction.
Boise went from being a hidden gem to one of the most overhyped housing markets in the U.S. Remote workers and out-of-state buyers flooded the city during the pandemic, sending home prices through the roof. But as interest rates climbed and the cost of living surged, the market started to cool—fast, according to Katie McKellar of Deseret.
Sellers are now slashing prices as homes linger on the market much longer than before. The problem? Wages in Boise never kept pace with the skyrocketing home values, making it one of the most overvalued markets in the country. Without a steady influx of new buyers willing to pay premium prices, the city’s housing bubble is at serious risk of bursting.
3. Phoenix’s housing market is cracking under its own weight.
Phoenix was another city that saw massive demand during the pandemic, fueled by investors, retirees, and remote workers looking for more space. But that demand is fading, and the cracks are already showing. Inventory is rising, bidding wars have cooled, and price drops are becoming more frequent.
One of the biggest red flags? Investors who bought up homes to rent out or flip are now struggling to find buyers. As more of these properties flood the market, prices could take a sharp dive. If Phoenix follows the pattern of previous boom-and-bust cycles, homeowners who bought at peak prices could soon be in trouble, as reported by Kris Van Cleave of CBS News.
4. Las Vegas is seeing investor panic as prices start to dip.
Las Vegas real estate has always been a rollercoaster, and right now, it’s teetering at the top. Investors poured into the city when home prices were climbing, but now that the market is slowing, many are scrambling to sell. Rising mortgage rates and a decline in out-of-state buyers are only making things worse.
With inventory increasing and fewer buyers willing to pay top dollar, Vegas is looking more and more like a bubble ready to pop. If another recession hits or tourism slows down, expect home values to fall even faster.
5. Sacramento’s market is cooling after a wild run-up in prices.
Sacramento became a go-to spot for Bay Area transplants looking for more affordable housing. But after a few years of soaring prices, many of those buyers have disappeared. Now, homes are sitting on the market longer, and price cuts are becoming the norm rather than the exception.
The problem? Sacramento’s local job market and income levels don’t support the inflated home prices. As affordability continues to erode, fewer buyers will be able to keep the market propped up. If demand doesn’t rebound soon, Sacramento’s housing market could see a major correction.
6. Tampa’s housing boom is cooling off faster than expected.
Florida’s real estate market has been on fire, and Tampa was one of the biggest winners. But as mortgage rates climbed, the city’s red-hot demand started to fizzle. Buyers who were once willing to pay well over asking price are now taking a step back, and homes are sitting longer on the market.
Investors played a huge role in Tampa’s housing surge, scooping up properties for short-term rentals and long-term appreciation. But if they start offloading homes to avoid losses, Tampa’s prices could tumble. The state’s booming population growth has kept the market afloat so far, but that may not be enough to prevent a serious downturn.
7. Nashville’s housing prices have outpaced local wages.
Nashville has been one of the fastest-growing cities in the U.S., attracting new residents with its music scene, job market, and quality of life. But as home prices shot up, affordability became a major concern. Now, with rising interest rates and a shift in buyer demand, the market is showing signs of slowing down.
Homes that once received multiple offers within hours are now sitting for weeks, and sellers are adjusting their expectations. If the market continues to soften, Nashville could be in for a much-needed price correction.
8. Denver’s overheated housing market is finally cooling off.
Denver has been a seller’s paradise for years, but the tide is turning. High home prices combined with rising mortgage rates have pushed many buyers out of the market. As a result, inventory is increasing, and bidding wars are no longer the norm.
Many experts believe Denver’s market was due for a correction. The city saw years of rapid appreciation, but now, with affordability stretched to the limit, demand is falling. If more sellers rush to list their homes while buyers remain hesitant, prices could drop significantly.
9. Charlotte’s rapid expansion could backfire.
Charlotte has experienced explosive growth, drawing in both companies and new residents. But with that growth came soaring home prices, which have now reached levels that many locals can’t afford. The result? Sales are slowing, and price reductions are becoming more common.
Charlotte’s market isn’t in full panic mode yet, but if interest rates stay high and fewer buyers enter the market, a sharper decline could be on the horizon. Overdevelopment and an increase in unsold homes could make the correction even worse.
10. Raleigh’s housing market is starting to lose momentum.
Like Charlotte, Raleigh has been a magnet for new residents and businesses, driving up home prices at an unsustainable rate. But now, the market is showing signs of slowing. Homes that once received multiple offers are seeing fewer bids, and inventory is climbing.
Raleigh’s tech-driven economy has helped keep demand steady, but if home prices remain inflated while affordability worsens, a correction will be inevitable. Buyers are becoming more cautious, and that shift could lead to falling prices in the near future.
11. Salt Lake City’s housing frenzy is grinding to a halt.
Salt Lake City saw a massive housing boom as out-of-state buyers flooded in, pushing home prices well beyond what many locals could afford. Now, with fewer buyers entering the market and inventory rising, home values are beginning to plateau—and in some cases, decline.
Utah’s strong economy has helped sustain demand, but it may not be enough to prevent a significant downturn. If sellers start to panic and lower their prices too aggressively, Salt Lake City could see a serious market correction.