Steepest Falling Residential Property Values in 15 Real Estate Markets
The housing market in several American cities is projected to experience significant declines in home prices over the next year, with the South, particularly Louisiana and Texas, being the most affected regions.
According to Zillow's updated forecast, the 15 U.S. housing markets expected to face the steepest home price declines from July 2025 to July 2026 are primarily concentrated in these states. Greenville, MS, located in the Mississippi Delta, leads the way with a projected decline of 15%.
Greenville's economy heavily relies on agriculture, and a potential decline in crop prices could contribute to the anticipated drop in home values. Other Mississippi Delta cities, such as Indianola and Clarksdale, are also set to experience declines, with Indianola projected to drop by 10.1% and Clarksdale by 13.6%.
In Louisiana, Houma, Lake Charles, Alexandria, Lafayette, New Orleans, Shreveport, Beaumont, and Monroe are all predicted to see declines ranging from 3.7% to 8.6%. These cities are all connected to the oil and gas industry, and volatility in energy market fluctuations could be a factor in the projected drops.
Texas cities such as Big Spring, Pecos, Raymondville, and Zapata are also on the list, with declines ranging from 10.2% to 14.2%. These cities, like their Louisiana counterparts, are heavily dependent on the energy sector. Pecos, for example, has seen rapid growth due to the energy sector but may be experiencing a cooling in the energy sector, leading to a 14.2% decline in home values.
Other cities facing economic hardships, such as Helena, AR, and Bennettsville, SC, are also predicted to experience declines. Helena, with high unemployment and poverty rates, is projected to lose 10.2% in home values, while Bennettsville, with economic headwinds related to declining manufacturing and limited diversification in employment opportunities, is set to drop by 12.9%.
Natchez, MS, known for its historic homes and tourism, is projected to experience a 10.3% decline. Meanwhile, Hobbs, NM, located in southeastern New Mexico and part of the Permian Basin, a significant oil and gas production region, is projected to experience a 10% decline.
Cleveland, MS, like its neighboring cities, has limited economic opportunities and slow population growth, resulting in a predicted drop of 13.4%. Opelousas, LA faces challenges common to rural areas, including limited job growth and aging infrastructure, leading to a 11.6% decrease.
Several Florida cities, such as Cape Coral and West Palm Beach, are also flagged for significant cooling and price drops, but these are part of a broader set of 24 Florida markets likely to soften rather than the top 15 steepest declines nationally. San Francisco stands out among large pricey metro areas with a projected 4.1% decline, consistent with its cooling market trend despite low inventory.
Zillow's latest forecast predicts a 1.4% dip in home values this year, primarily due to the increase in available homes. The overall U.S. home prices are expected to grow marginally (+0.4%) in the same period, indicating localized weakness in these specific markets. The Sun Belt, including Southwest Florida, is noted as a current epicenter of housing market weakness, with some Florida metros forecasted to see price declines as well—though not always as steep as those listed above.
[1] Source: Zillow's updated forecast [2] Source: Housing Wire [3] Source: Forbes Advisor [5] Source: The Motley Fool
- Investors may want to exercise due diligence before investing in the real estate market, as several American cities are projected to experience significant declines in home prices over the next year, particularly in the South.
- In Greenville, MS, a turnkey opportunity for investment could be at risk, as the city leads the way with a projected decline of 15% in home values.
- Mortgage lenders might want to carefully consider their mortgage offerings in the housing-market regions vulnerable to decline, such as the Mississippi Delta and certain cities in Louisiana and Texas.
- Personal finance experts suggest considering alternative investment options in markets with more promising rental income and growth, as cities such as Helena, AR, and Bennettsville, SC, are projected to experience declines in home values.
- Real-estate finance analysts argue that the overall U.S. housing market may grow marginally, with the Sun Belt being a current epicenter of housing market weakness.
- In the face of declining home prices, those in the real-estate industry may want to reevaluate their investment strategies and focus on adaptive, forward-thinking, and diversified approaches based on the latest market trends and conditions.
