Home Prices Are Falling in These 4 Cities

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What’s Really Happening in the U.S. Housing Market?

The latest data from the S&P CoreLogic Case-Shiller Index shows that home values are now falling in four major metro areas in the South and the West, signaling potential market softening in some regions. These cities—Dallas, Denver, San Francisco, and Tampa—all registered annual declines in sales prices for single-family homes in May.

While national home values increased by 2.3% year-over-year, this marks the slowest annual growth pace since July 2023. For buyers and sellers alike, this signals a housing market that is cooling—but in a very regional way.

Why Are Some Cities Falling While Others Rise?

There’s a clear regional divide playing out. As noted in the report, "The latest Case-Shiller home price data reflects a growing regional divergence in the U.S. housing market, with the Midwest and Northeast still booming, and the South and West increasingly soft."

Here’s a breakdown:

• Falling Cities:
  • Tampa saw the sharpest drop, with home prices falling 2.4%, marking its seventh consecutive month of year-over-year declines.
  • Denver & San Francisco: First annual declines in nearly two years.
  • Dallas: Continued its downward trend after turning negative in April.
• Rising Cities:
  • New York topped the list with a 7.4% rise in home prices over the past year.
  • Chicago & Detroit: Up 6.1% and 4.9%, respectively.

Even Los Angeles and other Western hotspots like Phoenix and Miami registered growth of less than 1%, showing weakness in markets that were once booming during the pandemic.

What’s Driving the Divergence?

The divide is being fueled by inventory and affordability. According to Nicholas Godec of S&P Dow Jones Indices, national home prices are remaining relatively stable—though just barely—as affordability remains tight and inventory levels limited.

In short:

• Northeast & Midwest: Tight inventory = upward pressure on prices.
• South & West: Higher inventory + slower sales = weaker pricing power.

Anthony Smith from Realtor.com notes that housing inventory has climbed 28.9% compared to last year, giving buyers more options—but also raising the stakes for sellers facing increased competition.

What This Means for Orange County Buyers and Sellers

Orange County sits in a unique position on the West Coast. While we aren’t one of the four cities seeing annual declines yet, the cooling in nearby metro areas like Los Angeles, San Diego, and San Francisco suggests a trend sellers need to watch closely.

At the same time, "The spring market lifted prices modestly, but not enough to suggest sustained acceleration," according to Godec. This means buyers may find opportunities to negotiate—especially if local listings rise.

For sellers, the key is pricing right and marketing effectively, especially in a market with softer seasonal momentum and more discerning buyers.

Bottomline

Whether you’re considering selling your Orange County home or looking to invest, these market shifts offer opportunities if you know where to look. The West may be cooling, but not all cities—and certainly not all neighborhoods—are created equal.

Let’s talk strategy. If you're thinking about making a move in Orange County, whether to upsize, downsize, or invest wisely, Whitestone Real Estate is here to guide you through every step. The market may be shifting—but with the right knowledge and local insight, you can still come out ahead.

Reference: Griffith, K. (2025, July 29). Home Values Are Now Falling Annually in These 4 Major Cities. Realtor.com.