Growing States, Shrinking Housing Markets — What’s Going on in Texas and Florida?

People are flocking to Texas and Florida, but that doesn’t necessarily mean these states are filled with real estate hotspots. In fact, three U.S. cities with the largest decline in home market values are located in these two states.

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Forbes recently published a story about cities with growing populations, that also have slowing real estate markets. Here is a look at the three Florida and Texas cities highlighted.

Also here is the current state of the housing market in every state.

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Cape Coral, Florida

Located in southwestern Florida, property values in Cape Coral peaked in 2022, but are now longer at the level they once were.

Specifically, the city has realized a 1.4% decrease in the average home value — $395,281 — in 2024, according to data provided to Forbes by Zillow and S&P CoreLogic. Notably, there was also an 0.8% drop in home prices from December to April.

This is good news for buyers, as rising inventory has given them the most negotiating power in any of the top 100 U.S. metro areas.

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North Port, Florida

Located approximately 45 miles north of Cape Coral, North Port real estate prices are on the decline. The average home value has dropped 1% to $455,626 and home sale prices have fallen 0.7%, according to information provided to Forbes by Zillow and CoreLogic.

The price decreases are due to high mortgage rates and rising insurance costs causing demand to slow, according to Forbes. The city was hit hard by Hurricane Ian in September 2022, which has likely contributed to the rise in insurance rates.

Austin, Texas

When the COVID-19 pandemic was at its height, the Austin real estate market was white hot. However, things have taken a cooler turn.

The average home value in Austin has declined 1.2% to $466,628, due to booming construction that caused the city’s home inventory to surge 37% above pre-pandemic levels, according to information provided to Forbes by Zillow.

Texas and Florida on the Rise

In total, Texas was home to four of the 10 metro areas that saw the largest influx of new residents from July 1, 2022 to July 1, 2023, according to the U.S. Census. Right behind, three of these areas were in Florida.

In Texas, these metro areas included Dallas-Fort Worth-Arlington (152,598), Houston-Pasadena-The Woodlands (139,789), Austin-Round Rock-San Marcos (50,105) and San Antonio-New Braunfels (48,071), according to United States Census Bureau .

Florida’s fastest-growing metro areas included Orlando-Kissimmee-Sanford (54,916), Tampa-St. Petersburg-Clearwater (51,622) and Miami-Fort Lauderdale-West Palm Beach (43,387).

Generally speaking, home values are also increasing in these states. However, property values in Florida appear to be both higher and rising faster than in Texas, but they’re selling more rapidly in the Lone Star State.

In Florida, the average home value is $398,077 — a 2.5% increase over a one-year period, according to Zillow . Homes on the market are taking a median of 35 days to reach pending status.

The average home value in Texas is $308,121, marking a 0.6% increase over the past year. Properties listed for sale are taking a median of 24 days to hit pending.

Given the popularity of Texas and Florida, it’s possible the Cape Coral, North Port and Austin real estate markets will pick back up. If you’re interested in buying or selling properties in these areas, it might be best to sit back for awhile and see what happens.

This article originally appeared on GOBankingRates.com : Growing States, Shrinking Housing Markets — What’s Going on in Texas and Florida?