The residential real estate market is slowly shaking off the cobwebs of a sluggish year of buying and selling, and quick-thinking homebuyers stand a good chance of snapping up a property at a lower price than in 2024—if they know where to look.
In more than half of the 50 largest U.S. metros, median list prices have plunged year over year—with San Francisco leading the way with a 10.87% decrease, according to the Realtor.com® December Housing Market Report.
Nationwide, the median list price decreased by 1.8% year over year, settling at $402,502 last month, even as the price per square foot inched up by 1.3% during the same time, pointing to a glut of smaller and more affordable homes on the market.
Mortgage rates are at a six-month high, climbing to 6.93% for the average 30-year fixed home loan for the week ending Jan.9, according to Freddie Mac. But the Realtor.com 2025 housing forecast projects that mortgage rates will average 6.3% across 2025.
And there’s more good news for prospective homebuyers: List prices are nosediving in major U.S. markets.
More homes for sale means lower prices
In the South and the West, inventory last year nearly approached pre-COVID-19 pandemic levels, and list prices are now finally starting to reflect the abundance of options on the market.
“Austin, Denver, Phoenix, and Nashville were the darling markets of 2021 and 2022 and places where prices went wild,” says Realtor.com senior economist Joel Berner. “Now, with more homes on the market, prices are returning to where they belong.”
The number of active listings nationwide surged in December, with 22% more homes up for sale year over year. New listings in the South and the West were also up, at 4.8% and 2%, respectively.
San Francisco going through struggles
San Francisco, a world-renowned tech hub crammed with the well-to-do set, has earned itself a reputation as an uber-expensive city boasting a cost of living 70% higher than the national average.
But the popular West Coast destination is not without its problems, including widespread homelessness, an opioid epidemic, and a shrinking business community—and it now appears those issues are starting to affect the city’s real estate market.
The median list price in the city is now at $889,499—a steep drop of 10.87%.
Berner says San Francisco’s plummeting median list price could be explained in part by looking at the city’s growing socioeconomic woes, “with companies leaving the region and affordability being especially challenging.”
The city’s new mayor, Daniel Lurie—a nonprofit executive and heir to the Levi Strauss family fortune—was sworn into office on Wednesday. He previously said he would declare a state of emergency on drugs on his first day in office.
He has also promised to ease the city’s home prices and vowed to build “enough housing, so our neighbors can afford to live here.”
Florida’s post-pandemic reality check
Florida’s real estate markets, including in the Miami, Orlando, and Jacksonville metros, had gotten a lot of attention in the post-pandemic market surge, but now they are “cooling considerably” as inventory returns to pre-pandemic levels, Berner says.
Miami alone saw a drop of nearly 10% in the median list price, down to $522,499.
Another factor affecting the downward trend in median list prices in some parts of the Sunshine State is a considerable uptick in new construction, especially of smaller and more cost-effective homes.
Below is a list of the top 10 cities where prices are dropping fast:
San Francisco, CA
Median list price: $889,499
Percentage change year over year: -10.87%
Miami, FL
Median list price: $522,499
Percentage change year over year: -9.9%
Austin, TX
Median list price: $498,500
Percentage change year over year: -7.68%
Kansas City, MO
Median list price: $369,995
Percentage change year over year: -7.48%
Tampa, FL
Median list price: $395,000
Percentage change year over year: -5.95%
Jacksonville, FL
Median list price: $384,500
Percentage change year over year: -5.69%
Denver, CO
Median list price: $577,350
Percentage change year over year: -5.35%
Phoenix, AZ
Median list price: $499,995
Percentage change year over year: -5.07%
Cincinnati, OH
Median list price: $319,050
Percentage change year over year: -4.76%
Orlando, FL
Median list price: $419,950
Percentage change year over year: -4.34%
