T
he US residential real estate market is slowly recovering from a sluggish 2024, offering opportunities for quick-thinking homebuyers to snag properties at lower prices than last year. In more than half of the 50 largest US metros, median list prices have dropped significantly, with San Francisco leading the way at a 10.87% decrease.

    Nationwide, the median list price fell by 1.8% year over year, settling at $402,502 in December, while the price per square foot increased by 1.3%. This suggests that smaller and more affordable homes are dominating the market. Mortgage rates have risen to a six-month high of 6.93%, but Realtor.com's 2025 housing forecast predicts they will average 6.3% across the year.

    The surge in inventory is driving down prices, particularly in the South and West, where listings nearly returned to pre-pandemic levels last year. "Austin, Denver, Phoenix, and Nashville were hot markets in 2021 and 2022, but now with more homes on the market, prices are returning to normal," says Realtor.com senior economist Joel Berner.

    San Francisco's median list price has plummeted by 10.87%, partly due to the city's growing socioeconomic issues, including homelessness and a shrinking business community. The new mayor, Daniel Lurie, has vowed to ease home prices and build more affordable housing.

    Florida's real estate markets are also cooling down as inventory returns to pre-pandemic levels. Miami saw a 9.9% drop in median list price, while Orlando and Jacksonville experienced similar declines. New construction of smaller homes is contributing to the downward trend in some parts of the state.

    Here are the top 10 cities where prices are dropping fast:

    1. San Francisco, CA (-10.87%)

    2. Miami, FL (-9.9%)

    3. Austin, TX (-7.68%)

    4. Kansas City, MO (-7.48%)

    5. Tampa, FL (-5.95%)

    6. Jacksonville, FL (-5.69%)

    7. Denver, CO (-5.35%)

    8. Phoenix, AZ (-5.07%)

    9. Cincinnati, OH (-4.76%)

    10. Orlando, FL (-4.34%)