RIP Zoomtowns: Why home prices are dropping in WFH-era hot spots

"Just a few years ago, housing markets in the warm, sunny parts of the US looked, well ... warm and sunny. In the halcyon days of 2021 and 2022, cities like Austin, Tampa, Phoenix, and Atlanta attracted swarms of movers. Home listings reliably drew multiple offers above the asking price, and buyers plunked down all-cash offers to fast-track their purchases."

"Flash forward to today, and the big "winners" of the work-from-home reshuffle - metros that drew hordes of footloose workers and disaffected coastal dwellers - have turned into losers. Fewer people are moving to so-called Zoomtowns. Home listings are piling up on the market. Prices are dropping. The anxiety has shifted from buyers trying to elbow their way in to sellers just trying to offload their properties."

"Housing markets in the Midwest and Northeast, on the other hand, are going strong. Inventory in those parts of the country remains tight, and prices are up. Homes are selling at a brisker pace than in the rest of the US. These cities didn't garner much attention during the pandemic (how many glowing headlines did you see about Buffalo, Cleveland, Milwaukee, or Detroit?), but sellers there have quietly held onto their bargaining power. By practically any measure, the country's real estate leaderboard has flipped."

Warm-weather metros that boomed during 2021–2022 — including Austin, Tampa, Phoenix, and Atlanta — have cooled as fewer people move to so-called Zoomtowns. Home listings in the Sun Belt have increased, prices are falling, and sellers face growing urgency to offload properties. Conversely, many Midwest and Northeast cities exhibit tight inventory, rising prices, and faster sales, preserving seller bargaining power. The shift reflects a two-tiered housing market driven by changing migration patterns and substantial new construction in the Sun Belt, which increased supply and contributed to downward pressure on prices as new homes reached the market.

Read at Business Insider