Falling house prices are a double-edged sword. For buyers, they promise increased affordability and opportunity, particularly in markets that may have felt out of reach just a year ago. However, for sellers, especially those who need to offload a home quickly, steep price declines can signal trouble, shrink potential profits, or even cause losses.

Housing market fluctuations are nothing new. However, recent data from Realtor.com paints a stark picture of where home values have taken the steepest nosedive. Their economists have pinpointed the top ZIP codes across the U.S. where home prices have fallen the most between the first quarter of 2024 and the first quarter of 2025, and some of these numbers are eye-popping, showing decreases of up to 25%.

What’s particularly interesting is that this trend isn’t limited to just one corner of the country. These price drops occur in ZIP codes spread across all four major U.S. regions—North, South, East, and West. According to Hannah Jones, a senior economic research analyst at Realtor.com, a few key factors are driving this trend. One is the sharp increase in housing inventory, which often leads to more competition among sellers. This dynamic is especially apparent in the South, where inventory has grown considerably.

“Areas where prices climbed quickly may now be seeing a correction,” Jones explains. “And ZIPs where inventory has started to build up, as in much of the South, could see prices fall as sellers look to attract buyer attention.”

So, where exactly are these steepest price drops happening? Below is a closer look at the top 10 ZIP codes where median home list prices have fallen the most yearly, showcasing a wide range of housing types, regions, and economic backdrops.

1. Spotswood, NJ (08884)

Median home list price: $449,000
Year-over-year decrease: -25%

Nestled in Middlesex County, Spotswood is a small suburban town in Central New Jersey, about 38 miles from New York City. While it lacks a direct NJ Transit rail station, it remains an attractive option for commuters thanks to nearby stations in neighboring towns. With a tight-knit community, well-rated schools, and a family-friendly atmosphere, Spotswood has long appealed to first-time buyers and those looking to move away from more expensive North Jersey suburbs. But with an increase in available listings and buyers hesitant due to rising interest rates, prices have taken a steep dive. Sellers are finding they need to price competitively or offer incentives to attract attention.

2. South Elgin, IL (60177)

Median home list price: $384,900
Year-over-year decrease: -25%

Located along the scenic Fox River in the western suburbs of Chicago, South Elgin is a community known for its parks, schools, and small-town vibe. The village has seen new development over the past decade, which may have contributed to a build-up in inventory. Despite its affordability compared to nearby urban hubs, higher mortgage rates and a cooling market have driven list prices down.

3. Carlsbad, CA (92009)

Median home list price: $1,199,000
Year-over-year decrease: -25%

Carlsbad, located along the Pacific coast just north of San Diego, is a picturesque beach town with high-end real estate, top-tier schools, and attractions like Legoland California and the Flower Fields. During the pandemic-era housing boom, the area saw a significant price rise as remote workers sought luxury homes near the beach. But as interest rates rose and affordability concerns grew, the market cooled—resulting in notable price corrections, even in desirable areas like Carlsbad.

4. Raleigh, NC (27615)

Median home list price: $465,000
Year-over-year decrease: -25%

Raleigh has been one of the South’s most popular destinations for relocation, thanks to its thriving tech scene, affordable living compared to coastal metros, and Southern charm. The 27615 ZIP code includes desirable neighborhoods with good schools and amenities. But with a surge in new construction and a wave of recent transplants now holding off due to economic uncertainty, supply has outpaced demand—leading to steep price reductions.

5. Tomah, WI (54660)

Median home list price: $225,000
Year-over-year decrease: -25%

In Central Wisconsin, Tomah is a small city between Milwaukee and Minneapolis. It offers a rural lifestyle with affordable real estate, popular with retirees and those looking to escape bigger cities. However, limited local economic growth and fewer buyers in the area have contributed to declining prices. When a market is driven more by lifestyle than economic opportunity, downturns tend to hit harder and last longer.

6. DeQuincy, LA (70633)

Median home list price: $210,000
Year-over-year decrease: -25%

Once a bustling railroad town, DeQuincy sits north of Lake Charles and offers a quiet, small-town life amid beautiful natural surroundings. While the town has cultural charm and history, economic instability and limited job opportunities have caused many would-be buyers to pause. With a buildup of available homes and fewer buyers entering the market, list prices have taken a significant tumble.

7. North Miami Beach, FL (33179)

Median home list price: $975,000
Year-over-year decrease: -25%

North Miami Beach has long been known for its proximity to downtown Miami and beaches, making it attractive to luxury buyers. However, the high-end market is particularly sensitive to broader economic swings, especially as luxury investors and international buyers grow more cautious. Despite Florida’s overall popularity and booming real estate headlines, 33179 is experiencing a market correction. This may reflect pricing that had previously outpaced what most buyers in the area could sustain.

8. San Jose, CA (95110)

Median home list price: $788,000
Year-over-year decrease: -25%

At the heart of Silicon Valley, San Jose has some of the highest real estate prices in the country. The 95110 ZIP includes central areas near downtown and the airport, which have traditionally appealed to tech workers. However, with tech layoffs in 2024 and a slowing startup ecosystem, demand for housing has softened. Additionally, a rise in remote work has lessened the need to live near the office, driving prices down in previously hot urban centers.

9. York, ME (03909)

Median home list price: $1,047,000
Year-over-year decrease: -24.9%

A postcard-perfect coastal town, York is one of Maine’s most popular summer destinations. With charming inns, historic lighthouses, and sweeping ocean views, it’s long been a magnet for second-home buyers and retirees. But with high interest rates and insurance costs rising in coastal regions, even affluent buyers are exercising more caution. The luxury segment in York has seen a dip in activity, leading to price reductions.

10. Schenectady, NY (12309)

Median home list price: $354,450
Year-over-year decrease: -24.9%

Part of New York’s Capital Region, Schenectady is rich in industrial history—it’s where Thomas Edison founded what would become General Electric. While the area has experienced revitalization, including new restaurants and a growing arts scene, the housing market hasn’t escaped the pressures of declining affordability and economic uncertainty. Some local buyers are priced out, while others are waiting on the sidelines.

What Does This Mean for Buyers and Sellers?

This is an opportunity for buyers to find homes in once-competitive markets at more accessible prices. However, it’s essential to remember that falling prices can also signal underlying local economic issues, excess inventory, or waning demand. Buyers should do their research—not just on prices but on neighborhood trends, employment growth, and long-term stability.

For sellers, this means adjusting expectations. Once red-hot markets may require more aggressive pricing, enhanced marketing, or home improvements to stand out. Sellers should work with experienced local agents who understand the nuances of their market and can guide strategic decisions.

Finally, for investors, this could be the perfect moment to intervene, especially in markets where the fundamentals remain strong and the drop appears temporary. Areas like Carlsbad, York, and San Jose may rebound quickly once economic confidence returns.

The real estate landscape is always evolving, and this current wave of price corrections is a reminder that even the strongest markets can shift. Whether you’re buying, selling, or investing, being informed and working with knowledgeable professionals is more important than ever.

About the Author

CALL ME TODAY!

☎️ (732) 213 -0325
🌐 CoriSellsNJ.com  
📧 [email protected]
RE/MAX CENTRAL Realtor®

If you are considering BUYING in Monmouth County, Click below for a Home Buyers Guide:
👉click here

If you are considering SELLING in Monmouth County, Click below for a Home Sellers Guide:
👉 click here

Want To Learn More?
Chat with Cori Dunphy!

Cori (732) 213-0325 Brokerage (732) 972 1000