- Introduction
The U.S. housing market in 2025 is undergoing a correction, with many regions seeing extended days on market, declining home values, and increased price reductions. While buyers are gaining more leverage, sellers in certain markets face prolonged sales cycles and lower-than-expected returns.
- Key Problem Markets
2.1 Florida’s Coastal Markets
Cape Coral, FL
Identified by The Wall Street Journal as the worst housing market in America.
Home prices have fallen sharply due to an oversupply of listings and declining investor demand.
The Worst Housing Market in America Is Now Florida’s Cape Coral – WSJ
Punta Gorda & Naples–Marco Island, FL
Year-over-year price declines of 10%+ in Punta Gorda.
Naples market suffers from 100+ days on market with nearly 20% of listings undergoing price cuts.
2.2 Texas Markets in Decline
Austin, TX
Home values have dropped ~4.3% YoY and nearly 18% since their 2022 peak.
Pandemic-era buyers may now face losses if they sell.
Why Texas homeowners might not make a profit selling COVID-era homes – MySanAntonio
Rockport & Port Lavaca, TX
Small-town markets with 100+ days on market.
High proportion of price reductions as buyers retreat.
2.3 Other Challenged Markets
New Orleans, LA
Median values have fallen ~6% YoY, and ~12% over two years.
Key West, FL
Median time to sell: ~105 days, with widespread markdowns.
Forrest City, AR & DeRidder, LA
Smaller rural markets where inventory outpaces demand, leading to long stagnation periods.
- Drivers of Weak Seller Conditions
Rising inventory: More sellers than buyers, particularly in Florida and Texas.
Pandemic price hangover: Markets that overheated between 2020–2022 (Austin, Cape Coral) are now correcting hardest.
Economic headwinds: High mortgage rates and affordability gaps limit buyer pools.
Regional risks: Florida markets face added insurance and climate concerns, further discouraging demand.
- Comparative Snapshot
Market Challenge Key Metric (2025)
Cape Coral, FL Worst-performing U.S. market Steepest YoY value drop
Austin, TX Post-boom correction –18% over 2 years
Naples, FL Long sales cycles ~100 DOM; many markdowns
Punta Gorda, FL Sharp value decline –10% YoY
New Orleans, LA Economic stagnation –6% YoY, –12% 2-year loss
Rockport, TX Slow absorption 104 DOM
Key West, FL Luxury slowdown 105 DOM
- Conclusion
For homeowners, selling in 2025 is significantly harder in Florida and Texas coastal metros, as well as in smaller rural towns with limited demand. These areas face:
Longer time on market
Frequent price reductions
Potential negative equity for recent buyers
In contrast, buyers in these markets may find unique opportunities as prices adjust downward, making them more affordable than in past years.