7 Real Estate Boomtowns Expected To Plummet in Value by the End of 2025
The pandemic was a time of shrinkage in many regards — but not so for every city. In fact, some cities thrived. Pandemic “boomtowns” saw an influx of people who looked for cheaper places to live when they were working from home and, therefore, the housing prices started to rise.
Well, experts think some of these “boomtowns” might see their home values drop big-time by the end of next year. Let’s look at seven real estate boomtowns expected to plummet in value by the end of 2025.
Boise, Idaho
Boise stands out as the poster child for pandemic boomtowns. “Boise had by far the greatest appreciation over that period, reaching 230% of its initial value in May 2022 before starting to depreciate,” said Thomas (“Thom”) Malone, a real estate economist at CoreLogic, who is responsible for analyzing housing markets and home price trends.
Despite some cooling, Boise’s real estate market remains inflated, with prices still more than double what they were five years ago as of February 2024.
People flocked to Boise for cheaper houses and a laid-back lifestyle. But now that it’s not so cheap anymore, and with more folks heading back to the office, Boise might see house prices fall significantly by 2025.
Austin, Texas
Austin became a hotspot for tech workers and companies during the pandemic. Everyone wanted a piece of its cool vibe and job opportunities.
But here’s the thing: When too many people rush to one place, it gets expensive fast. Malone explained that when this happens, people start looking elsewhere. Austin might lose some of its appeal as other cities start to look like better deals.
Phoenix
Phoenix was a big hit with its warm weather and (initially) affordable homes, but with growing concerns about heat and water, it might be one to avoid.
As more companies call workers back to the office, fewer people might want to move to Phoenix. All this could lead to a drop in home values, making it a city to watch.
Salt Lake City
Salt Lake City seemed like a perfect place to move during the pandemic — a strong job market, inexpensive housing and tons of outdoor activities made it a beacon in the gloom. But just like the other cities, it’s gotten more expensive.
As prices have gone up so much, Salt Lake City isn’t the bargain it used to be. This could mean fewer people wanting to move there, potentially causing house prices to fall by the end of 2025.
Tampa, Florida
Tampa is part of what Malone called the “second wave” of boomtowns, especially in Florida. He thinks places like Tampa “are probably the most likely places to be seeing drops in demand now or soon.”
Why? Well, as Florida got more expensive, it became less attractive to out-of-state buyers. This could lead to a big drop in home values by 2025.
Gainesville, Florida
Gainesville, with its university and growing tech scene, was another Florida hotspot. But it might face the same issues as Tampa.
As the price gap between Florida and other states shrinks, people might start looking elsewhere to buy homes. This could cause Gainesville’s house prices to tumble by the end of 2025.
Palm Beach, Florida
Palm Beach, known for its fancy homes, saw lots of wealthy buyers during the pandemic. But even luxury markets can face problems.
“When prices in Florida rose, the gap in prices between it and the Northeast shrunk,” Malone said. This means rich buyers might start looking at other high-end areas again, potentially causing Palm Beach’s home values to drop by 2025.