T
he housing market's sizzling pace is starting to lose steam, with prices plummeting in several cities. The pandemic-fueled surge in house prices has finally begun to subside, as recession fears and rising mortgage rates have cooled buyer enthusiasm. According to Redfin data, 10 of the 50 largest US cities saw price drops year-over-year, primarily in Texas and Florida.

    In these cities, sellers are being forced to negotiate – and often slash – their asking prices. "Buyers are getting picky," says Venus Martinez, a Redfin agent. "They're waiting for mortgage rates to drop or hoping the recession won't materialize." As a result, inventory is rising, with new listings up over 11 percent from last year.

    Jacksonville, Florida, has seen the steepest price decline, with its median sale price dropping 2.8 percent since last year. The city's housing market is reeling from increased regulations and soaring homeowner association fees and insurance costs following the Surfside Condo collapse in 2021. Many residents are trying to sell their properties, flooding the market.

    Orlando followed closely behind, with its median sale price dipping by 0.4 percent. Texas cities also saw significant price drops: San Antonio (1.8%), Austin (1.2%), Dallas (0.8%), and Fort Worth (0.2%). The Lone Star State's housing boom during the pandemic has given way to a market correction, as rising costs and climate disasters have made it less attractive for buyers.

    The national median price still rose 2.6 percent year-over-year, reaching $389,400 – but that's a far cry from the double-digit spikes seen during the pandemic. As the housing market cools, sellers are being forced to adapt, and buyers are seizing the opportunity to negotiate prices down.