Sellers Panic — 8% Slice In A Year?

Red downward arrow on U.S. dollar bills — PRICES GO DOWN

Home prices are dropping fastest in Austin, Tampa, and Memphis, with Austin sellers slashing per-square-foot prices more than 8 percent in a single year.

Story Snapshot

Austin, Tampa, and Memphis rank as the top three metros for falling home prices per square foot in August 2026, according to Realtor.com.
Austin’s decline has held steady for months, hitting 8.1 percent year-over-year in August after similar drops in March, May, and July.
Home prices per square foot fell in 36 of the 50 biggest U.S. metros, showing the slowdown reaches well beyond these three cities.
Sun Belt metros that boomed during the pandemic now face a supply glut as new construction catches up with buyer demand.

Three Cities Lead The Nation In Falling Home Values

Realtor.com’s September 2026 report names Austin, Tampa, and Memphis as the steepest decliners among the 50 largest U.S. metro areas.

Austin homes lost 8.1 percent in price per square foot over the past year. Tampa dropped 5.6 percent. Memphis fell 4.1 percent. These numbers track asking prices, not final sale prices, but they show where sellers are cutting the hardest.

The US cities where home prices are falling the fastest https://t.co/u5mslbv6At

— FOX Business (@FoxBusiness) September 9, 2026

This pattern is not new. The same three cities topped the decline list in July 2026, with Austin down 8.5 percent, Memphis down 6.0 percent, and Tampa down 4.8 percent.

Back in March, Austin and Memphis already led the pack, joined that month by San Antonio instead of Tampa. The repetition across four separate monthly reports tells a clear story: these markets are cooling, and they are cooling fast.

Austin’s Boom Turns Into A Correction

Austin’s fall stands out because it followed one of the biggest housing booms in American history. Remote workers and tech money poured into the city during the pandemic, driving prices sky-high.

Now the median list price sits at $475,000, down 9.5 percent from a year earlier. Builders kept adding homes even as demand cooled, leaving Austin with more supply than buyers can absorb.

Zillow’s research backs up the trend from a different angle. Its 2025 data already showed Austin’s typical home value falling 6 percent year-over-year, right alongside Tampa’s 6.2 percent drop.

By October 2025, Austin’s typical value had slipped to $426,454, a 6.1 percent annual decline, while Tampa sat at $356,298, down 6.09 percent. Two separate data providers, two different months, the same two cities near the bottom.

Tampa And Memphis Face Their Own Pressures

Tampa’s slide shows up in more than one type of measurement. The Case-Shiller home price index for the Tampa metro area barely moved between April and June 2026, staying essentially flat after months of softening.

Mortgage News Daily’s tracker confirmed Tampa’s year-over-year change remained negative into 2026. Florida’s condo market troubles and hurricane insurance costs have added extra strain on top of basic supply and demand shifts.

Memphis carries less national attention than the Sun Belt giants, but the numbers put it firmly in the same category. It has appeared among the top three or four decliners in nearly every Realtor.com monthly report since March 2026.

Slower population growth and a smaller luxury buyer pool may explain why price cuts land harder there than in bigger metros with more diverse demand.

Why The Sun Belt Is Absorbing The Biggest Hit

Housing economists point to overbuilding as the common thread tying these markets together. J.P. Morgan’s housing research flagged the Sun Belt and West Coast as regions carrying an oversupply of new homes, even as the national shortfall sits near 1.2 million units overall.

Builders chased pandemic-era demand with new construction, and now those homes are hitting the market just as buyer budgets get squeezed by higher rates and stretched affordability.

Zillow’s own research described this dynamic plainly: markets that restocked their inventory shelves are now seeing softer price growth, while tighter-supply regions hold steadier.

That split explains why Midwest and Northeast metros have largely avoided the price cuts hitting Austin, Tampa, and Memphis. Supply, more than any single economic shock, is driving the divide between rising and falling markets right now.

For homeowners in these three cities, the trend means slower equity growth and tougher negotiations at resale. For buyers, it means more room to negotiate and fewer bidding wars than just a few years ago.

Whether this correction continues through the rest of 2026 will depend heavily on how quickly builders slow new construction and whether mortgage rates ease enough to draw buyers back into these markets.

The broader 36-of-50 metro decline suggests this is not isolated to three cities but part of a wider national cooling. Still, Austin, Tampa, and Memphis remain the clearest examples of what happens when a housing boom outruns real demand.