How to Identify the US Housing Markets with the Biggest Post-Pandemic Price Drops

Introduction

During the pandemic housing boom, demand skyrocketed thanks to ultra-low interest rates, government stimulus, and the rise of remote work. The Federal Reserve estimates that new construction would have needed to increase by roughly 300% to meet that surge. But housing supply cannot ramp up quickly—so prices overheated dramatically. By June 2022, U.S. home prices had risen 43.2% above March 2020 levels. In some metro areas like Naples, Florida, and Austin, Texas, the increases were even steeper—over 70%. Since then, mortgage rates spiked and the boom fizzled. Nationally, prices have only risen 2.2% from the peak through March 2026, while wages jumped 14.7%. However, some markets have experienced a true price correction—with declines of 10% or more from their 2022 peak. This guide will walk you through how to spot these housing markets with the biggest post-pandemic price drops, using the same data and analysis that ResiClub and Zillow provide.

What You Need

• Access to Zillow Home Value Index (ZHVI) – the primary data source for tracking metro-area home prices
• Knowledge of the top 300 largest U.S. metro areas – the analysis focuses on these
• Understanding of the June 2022 benchmark – the peak of the pandemic housing boom
• Basic familiarity with percentage changes – we compare current prices to the 2022 peak
• (Optional) Subscription to ResiClub newsletter – for ongoing housing market updates

Step-by-Step Guide

Step 1: Understand the Pandemic Housing Boom and Its Aftermath

The first step is to recognize the scale of the boom. From March 2020 to June 2022, U.S. home prices shot up over 43%. In overheated markets like Naples, FL (+73%); Austin, TX (+73%); Punta Gorda, FL (+71%); Cape Coral-Fort Myers, FL (+70%); and North Port-Bradenton-Sarasota, FL (+69%), the increases were even larger. High demand drained inventory, and prices became unsustainable. When mortgage rates spiked in 2022, the boom ended. The national housing market entered a “recalibration” period. But some local markets experienced actual price declines—not just slower growth. Understanding this context is essential before diving into the numbers.

Step 2: Focus on the Most Overheated Markets

Markets that saw the biggest run-ups during the boom are often the ones most vulnerable to corrections. For instance, many Florida markets and Sun Belt metros like Austin and Phoenix are on the list of biggest declines. Use ResiClub’s analysis of the Zillow Home Value Index to identify which of the top 300 metro areas had the highest price surges from March 2020 to June 2022. Those with increases above 60% are prime candidates for a subsequent drop.

Step 3: Compare Current Prices to the June 2022 Peak

This is the core of the analysis. For each metro area, calculate the percentage change from its local peak in June 2022 to the most recent reading. In the original analysis, 15 markets showed declines of at least 10% from that peak. For example, Austin-Round Rock-Georgetown, TX, is down 27.8%; Punta Gorda, FL, is down 25.4%; Cape Coral-Fort Myers, FL, is down 18.9%; and so on. Use Zillow’s data to track each market individually. Look for any market where the current index is significantly below the June 2022 value.

Step 4: Examine the List of Top Declining Markets

Based on ResiClub’s analysis, the 15 metro areas with the biggest home price declines from their 2022 peak are:

1. Austin-Round Rock-Georgetown, TX – -27.8%
2. Punta Gorda, FL – -25.4%
3. Cape Coral-Fort Myers, FL – -18.9%
4. North Port-Sarasota-Bradenton, FL – -17.5%
5. New Orleans-Metairie, LA – -13.8%
6. Houma-Thibodaux, LA – -13.2%
7. Boulder, CO – -11.8%
8. Phoenix-Mesa-Chandler, AZ – -11.6%
9. Naples-Marco Island, FL – -11.5%
10. Lake Charles, LA – -11.4%
11. San Antonio-New Braunfels, TX – -11.2%
12. San Francisco-Oakland-Berkeley, CA – -11.0%
13. Denver-Aurora-Lakewood, CO – -10.6%
14. Dallas-Fort Worth-Arlington, TX – -10.1%
15. Boise City, ID – -10.1%

Notice that many are in Florida, Texas, and Colorado. This pattern indicates that Sun Belt and Mountain West markets—which boomed the most—are now correcting the hardest.

Step 5: Check Year-Over-Year Trends to Determine If Prices Are Still Falling

Just because a market is down from its 2022 peak does not mean prices are still declining. For example, New Orleans is down 13.8% from the peak, but year-over-year (latest reading) it is up 2.1%. Similarly, some neighborhoods in San Francisco are seeing noticeable price increases this spring. To understand whether a correction is ongoing, compare the current index to the same month one year earlier. A negative year-over-year change suggests continued weakness; a positive change may indicate stabilization. Use this nuance to avoid assuming every market listed above is still in freefall.

Tips and Conclusion

• Remember the broader context: Nationally, home prices are only 2.2% above the June 2022 peak—far below wage growth of 14.7%. The recalibration is not uniform.
• Focus on fundamentals: Many of the softest markets are in the Southern and Mountain regions, where the boom was most extreme. Affordability pressures, insurance costs (especially in Florida), and changing work patterns can sustain declines.
• Use multiple data points: The Zillow Home Value Index is one tool. Also consider inventory levels, months of supply, and days on market to confirm a correction.
• Beware of outliers: Even within a declining metro, individual neighborhoods or price tiers may behave differently. Always zoom in.
• Stay updated: The list may change as new data comes in. Follow sources like ResiClub for monthly updates.

By following these steps, you can identify which housing markets have experienced the biggest post-pandemic price drops—and understand that a drop from the peak doesn’t always mean prices are still falling. Use the data wisely, and you’ll be well-equipped to navigate today’s housing market.