The Best (and Worst) Housing Markets in America

Dave:
The housing market is split, much like the rest of the economy. Some areas are up, others are struggling. Regional variation right now is really high. And although you can invest in any type of market, any market conditions, the tactics you should use depend largely on where in the country you are actually investing. So in today’s episode, we’re going to dig into some important regional trends that we’re seeing across the country. We’ll look at housing price trends, of course, but we’ll also look a level deeper. We’ll look at inventory, affordability, and critically foreclosure and delinquency trends that could spell trouble in certain markets. And if you combine all this data together, you’re going to have an analysis that not only tells you what’s actually happening in your market, but what you should be doing about it.
Hey everyone, welcome to On The Market. I’m Dave Meyer, housing analyst and chief investment officer at BiggerPockets. Today on the show, we are going to dig deep into the different regions of the country and how each of them are behaving. We’re talking about prices, of course, but we’re also going to look at inventory, which helps us forecast what’s going to happen next. We’ll talk about affordability, delinquencies, and crash risks in different regions of the country. And we’re doing it all so you understand how to approach investing in your specific market. And I’ve done a lot of research for this episode. It’s going to be a great show. But before we get into it, I want to just give a quick word on the war in Iran and how it could impact the housing market. Obviously, this war has brought implications beyond just the housing market, but I’ve gotten a lot of questions about how the war could impact the housing market.
I’ve also seen a lot of, frankly, really bad takes about it on social media. So I just wanted to weigh in with my perspective. The long and short of it is we just don’t know. I know that’s frustrating. It’s unsatisfying, but that’s the honest answer. We don’t know if this war is going to last a couple of weeks and then the status quo resumes. We don’t know if this spreads to a broader regional conflict. We just don’t know. And I think it is important to admit that. So all of those videos out there saying that this is definitely going to cause the housing market to crash, or the other ones, which I’ve seen that say that this is going to lead prices to accelerate. All of them are just speculation. They’re not based on any evidence. They’re not based on any actual fundamentals changing. People are just trying to get attention.
That said, this is an important change in the geopolitical climate, and therefore the economy can be impacted. The way I like to think about this and the way I just generally think about the housing market in general is probabilities. If you listen to the show, you know that I never say a crash will never happen. Prices will definitely go up. I am very careful to say things like, “I don’t think a crash is the most likely scenario,” because as a data person, it is my whole job to think in probabilities to say, “Okay, the great stall is the most likely scenario, but could other things happen?” Of course, other things can happen. And that’s how I think about things. And at BPCON, back in October 2025, I shared my predictions for 2025 where I said, I thought there were basically four different scenarios. The biggest probability is the Great Stall.
I’ve talked about this a lot, but this is a modest housing correction where real home prices go down, wages hopefully keep going up, mortgage rates come down a little bit, and that brings affordability back to the market. That I gave about a 50% chance this year. But I also acknowledge that in 2026, there’s a lot of uncertainty and there’s three other things that could happen. We could have a melt up if rates dropped really quickly. Prices could go up. I gave that about a 25% chance. I said a chance of a crash was about 15%. And then I always keep one other category for a Black swan event. This is things like the COVID-19 pandemic or nine eleven. Huge impacts on the economy, huge impacts on society. And you just by definition, a black swan event means it’s sort of outside the realm of normal fundamentals and you can’t really see it coming.
And I always keep about a 10% chance of a black swan event happening because by definition, we don’t know whether that’s going to happen. So that’s where I came out for 2026, 50% chance of the great stall, 25 melt up, 15% chance for a crash, 10% of a black swan event. Now, sitting here today, I still think the great stall is the most likely outcome. But the other variables, I do believe that they have changed. The black swan variable is much higher right now. We now know a little bit about it. It might not be a black swan, but if there’s a giant global war or a huge regional conflict, the chances of that impacting the economy are up. Keeping that still under the black swan category, and I think that’s now 30% chance. I think there’s a good chance this does impact the market.
How? We don’t know. That’s the whole point of it being a black swan event. We don’t know how it will impact the market, but is there a rising probability that geopolitical conflict impacts our economy? For sure. Absolutely. You can’t deny that. Next, although I still think a crash is unlikely, I’d say the probability has increased a little bit. Let’s just call it 20% up from 15. But a melt up on the other hand, upside huge appreciation I think is less to me, maybe 15% for now. I still think great stall, again, most probable at 40-ish percent. So in short, what’s happened is that we have even less certainty than we did going into a very uncertain year. A modest correction, still the most likely outcome in my opinion, but the world just feels a little bit like a Tinder box, and there’s no knowing how that plays out.
The overall risk to the downside is up in my opinion, and it just underscores what I’ve been saying for years, which is conservative investing will win the day in this era. That does not mean you cannot invest. And as we’re going to talk about in the rest of this episode, there’s still plenty of opportunities even in an uncertain market, but you need to be super honed in on what’s happening in your market. So with that, let’s get into our regional market analysis, which is what we had planned for today’s episode. First up, we’re going to talk about appreciation and just get a general sense of what’s happening in the country. Depending on who you ask, nominal home prices, non-inflation adjusted home prices across the country are up like zero to 1%. So basically flat. I think that’s pretty in line with what I have been projecting for this year.
As a reminder, I said a little bit flat, probably a little bit down, maybe negative one, maybe negative 2% nationally. So there’s no reason to think that there is a crash. This is a classic housing correction where we are seeing prices nationally trend from what they were a year or two ago at 5% up to 3% up. Now they’re at 1% up. And I think by the end of the year, they will probably turn negative nationally. But in this episode, what we’re talking about is not national data. We’re going to dig into regional trends and how things are changing across the market. And I’m going to throw a map up here for anyone who’s looking on YouTube, but basically what you can see, it’s a map that shows where prices are going up, where they are basically flat and where they are declining. And the map is really stark because you could basically draw sort of like a diagonal line starting in Washington and down to Florida.
So from the northwest down to the southeast and everything north of that line, so the Midwest and the northeast, those markets are basically still positive. You see the strongest growth in places like Wisconsin and the Northeast and Connecticut and New York, Massachusetts, they still have above inflation, real home price growth. Everything south of that line, and I’m not saying every single market, but if you look south of that line, the vast majority of markets are down. Yes, there are some places randomly in New Mexico or West Texas that are up, but all of Florida is down basically much of Texas, most of the big metro areas, almost all of California, Utah, Denver, these places are all seeing declines. So when I said there’s a split in the market, that is absolutely true. Now later in the episode, I am going to call out specific metro areas that I think have the biggest risk and the biggest upside, but I want to get through some of more of the data before we do that because I think it will make more sense to everyone once I’ve gone through not just what happened with prices last year, like last year’s results, don’t tell us what’s going to happen this year, right?
We have to look at other data to start projecting what’s going to happen going forward, and that’s what we’re going to do. So the next data set I want to look at is actually a forecast that Zillow puts out all the time. I think they update it monthly about forecasts for housing markets, specific housing markets in the country. And when you look at their forecast, and again, I’ll throw the map up on YouTube, but what you see from this is that largely they believe that the trend is going to continue. If you look at the West Coast, Seattle, Portland, much of California, we’re looking at modest decline. So if you look at most of California, it’s like a 2% decline. Seattle’s like a 1% decline. If you look at Utah and Phoenix, it’s like basically flat. So what they’re projecting is a lot of the markets actually that were down a little bit last year, none of them were down a lot.
They were down maybe 1%. A lot of them are actually flattening out. So that is relatively good news. The areas of the country where they’re projecting the biggest declines are where they have been the biggest so far. So that is mostly in New Orleans. That’s the biggest decline they’re forecasting at negative 4%. Austin continues to just get beat up at negative 3%. Denver, Colorado, Springs, a lot of Louisiana is forecast to go down, but surprisingly, they’re actually projecting sort of a bottom in the Florida market. So that is positive news for anyone who’s invests there because that market has been hit hard over the last two years, but they’re projecting rebounds in most of Florida, basically except Punta Gorda and Tampa, that general area. Now in the north of the country, north of that line I was describing, they’re seeing modest growth in most places.
So I would call the projection for most of the Northeast and the Midwest flat in real terms. So yeah, they’re projecting it’s going to go up one or 2%, but remember, that means that’s below the pace of inflation. And so we’re going to have negative real price growth in most of those markets. That’s why I’m calling, even though most of these markets might go up on paper, that’s why I’m calling it a correction because negative real home price growth in my book is a correction. Some markets will grow faster than that. Rochester, New York continues to outperform. They’re projecting a 4% year over year growth. Hartford is projecting 4% year over year growth. You see places around Milwaukee, Chicago’s up a little bit. So that’s what they’re projecting. Basically modest growth in the Midwest and the Northeast, modest declines in most of the South and the West.
The only real areas they’re projecting big declines are in Louisiana and Texas as of this point. But do we buy this? Yeah, Zillow is making their own forecast, but I don’t personally just like to look at what they say is going to happen and assume that’s correct. So I actually did my own research into affordability, into inventory trends, into delinquency rates. And we’re going to get into all of that to fact check this and see if we actually believe what Zillow is saying or if we should have our own forecast for different markets. We’re going to get into that right after this quick break. We’ll be right back.
Welcome back to On the Market. I’m Dave Meyer going through our regional market update. Before the break, I shared what happened last year in terms of appreciation rates and what Zillow thinks is going to happen next year, which is largely a continuation of what we saw last year. But I don’t want to take Zillow’s word for it. I think that we should, as real estate investors, go a level deeper and understand each of the variables that are going to dictate whether or not your market is going to go up, is going to remain flat, or is at risk of declines. And I’ve pulled together a bunch of different data sets. The first one is going to be an affordability update. Then we’ll talk about some other data sets includes delinquencies and homes underwater that have negative equity. We’re going to get to all that, but we’re going to start with affordability.
As you know, if you listen to this show, I think affordability is kind of the key to the market. It has been for several years, and I think it’s going to be important for predicting where markets go. So far, that prediction has been right, and so I’m sticking with it. I just follow affordability really, really closely. And the good news there is that affordability is improving. With incomes now rising faster than home prices and mortgage rates right around 6% as of right now, home affordability improved to its best level in nearly four years. The housing market’s not great, but it is good to hear that. I am very happy about that. The monthly payment now on average for an average price home fell to $2,091. That is down 7% from a year earlier. That’s $164 a month in savings. That is the lowest amount you have needed to buy an average price home since early 2023 in three years.
So that’s good news. And overall, the one that I am really looking at is something that they call the median income to payment ratio. Basically, how much of your income is going towards your mortgage payment. Now, if you look back in 2023, it peaked at, as long as I have data for it, the highest it had been, it was at 34%. So just so you know, most budgeting experts say that you should put about 30% of your income towards housing at the most. So having it be at 34% means that pretty much most, at least half of the country was priced out of those markets. Fast forward to today, it is now at 27.8%. It’s still not great, but it is below that sort of critical threshold of 30%, and it’s continuing to fall. So I think that is highly encouraging on a national level, but of course, we’re talking about regional differences right now.
My thesis has been for a while that the markets that are the most affordable are going to be the most resilient in this housing correction and the ones that are the least affordable are going to struggle the most. Now, that is not universally true. You see markets like San Francisco that are actually doing well right now, but generally speaking, I think that is a good rule of thumb to follow. If the market is super unaffordable to the people who live there, there is going to be risk there. What makes me happy about this is we have now seen 15 major markets return to their long run affordability norms. So this just means that, yeah, during COVID, things got super stretched. It was really unaffordable for a long time, but we are now seeing markets like Cleveland, Detroit, Memphis, Tennessee, and Chicago all get back to their regional trends.
Even pretty expensive markets like Denver are getting close to their long-term trends. Portland, Oregon getting close to its regional trends. A lot of places in Texas are getting closer and closer. Now, I’m not saying things are good. Housing prices are still really unaffordable, but in these markets where you are near long-term affordability trends, there is going to be, in my opinion, a floor on how bad the correction can get because people can still buy homes. And sure, there is risk of big unemployment sometime in the future, but right now that’s not happening. The unemployment rate is relatively low. And so these markets I think are still going to do pretty well. Other markets though, when you look at places like LA and San Francisco or Tampa, for example, they’re still well above long-term affordability trends. Same thing’s going to happen in Seattle. We’re still seeing this in places in the Northeast.
Some of those markets are still going well, but I think as long as those long-term affordability trends remain elevated, there is risk of a correction, and that’s why I’m bringing up this data. So that is one thing I highly recommend everyone listening. Look up in your market, look at the price to income ratios in your market, and also look at the income to payment ratio. That is also super important. You can just Google these things, you can put into ChatGPT and ask these questions, see where your market is in terms of affordability. If it’s really above long-term affordability trends, that’s one data point that will say, “Hey, there’s actually higher risk in this market.” That does not mean there’s going to be a crash. We have to look at all this data together, but in this episode, I’m just walking you through different data sets you should collect to make this assessment for yourself and affordability, first thing I would check out if I were you.
The second thing we want to look at is delinquencies because major risks of crashes come when there is something called forced selling. When people can’t pay their mortgages and they need to put their home on the market before they really want to, that can increase supply and that could create downward pressure on pricing. As we do with all of these things, we’ll start with a big national picture. Delinquencies actually fell in December. So all those people saying that delinquencies are going up, that is not true. We actually saw that they were going down 16 basis points, so not a lot, but it’s now at 3.68%. And just for some context, because I know that number probably doesn’t mean anything to any of you, pre-pandemic, the delinquency rate was about 4%. So we were still below where we were in 2019 when no one was freaking out about delinquencies.
No one was worried about a foreclosure crisis in 2019, and we’re still below those numbers. So keep those things in mind. It’s an important grounding exercise amidst the many headlines you’re likely to hear about delinquencies going up. Now, the improvement that we saw was very modest, but it was a small improvement, was largely driven by early stage delinquencies declining. That’s great. Less people are going delinquent. This is in December, the last month we have data for than there were in November. The flip side of that though is we need to call this out that 90 day delinquencies, more serious delinquencies are rising and they’re at the highest point they’ve been in three years. Now, compare that to 2008. We’re not even close. They’re not even in the same stratosphere on opposite ends of the graph, but it is important to know that they have risen and are at the highest point in three years.
I am not surprised by any of that. If you look at the forbearance programs and the other foreclosure moratoriums and all that, yeah, three years ago, a lot of those were still in place. So delinquencies were going to be lower. They are going to revert back to the mean, and we are seeing that right now. We are also seeing a couple other national trends, VA loans, which I had mentioned were going up and something that I wanted to keep an eye on. Good news there, they’ve actually started to go down by a quarter point, so that’s really good. To me, the biggest risk, sort of the one red flag, I wouldn’t even call it a red flag, a yellow flag that we need to keep an eye on is FHA delinquencies. Those are actually up. 13% of FHA mortgages are delinquent right now. That’s nearly a million home buyers.
And that sounds scary. 13% delinquencies is really high when you consider the national average is 3.7, right? But I just want to remind everyone that FHA loan delinquencies are always higher. Even in 2019, when things were fine and no one was freaking out, FHA delinquencies were 10%. They were still 10%. So they’re up to 13. That’s an increase for sure. It’s something we need to keep an eye on. But just remember that that’s actually just 300 basis points higher than where we were in 2019. It’s also important to remember that FHA loans are just a small portion of the market. They’re about 10% of all loans. So if we talk about 13% of 10% of mortgages, it’s like 1% of the total market. So that is just keep that in mind. It’s not an emergency right now, but if it keeps going up, it’s something we are going to talk about.
Now, let’s go back to our regional analysis because I want to talk about where we are seeing delinquencies rise faster than the national average and where they are lower than the national average. And I’m going to throw up another map on YouTube here, but what you can see is the Southeast has the highest rates. Florida, Texas, Alabama, Arkansas, Georgia, South Carolina, actually, we see the highest rates of delinquencies in the Southeast. Some of them in Louisiana are at eight or 9%. That’s high. That worries me. I’ll just be honest. You see eight, 9% delinquency rates in a single market. That’s a concentration of delinquencies that worries me. We do also see some places in the Northeast, but it’s not as severe. The high ones in the Northeast are four and a half, 5%, but we are starting to see those rates tick up. Now, interestingly enough, in the markets where we have seen a lot of declines over the last couple of years in terms of prices, those people still paying their mortgages, right?
If you look at Seattle, we’ve seen a decline or low affordability, super low delinquency rate, 1.7%. We look at San Francisco, 1.2%. San Jose, 0.8%. Portland, Oregon, 2%, all below the national average, super healthy numbers. So really nothing to worry about there. Even in markets that are seeing a lot of risk right now like Denver, that only has a 2.2% delinquency rate. So this is why I’m telling you that we have to collect all this different data before we make our analysis. If you look at a market like Seattle, you could say, okay, prices were down, affordability is low, there’s going to be a crash. Yeah, there’s going to be downward pressure in that market, but when we look at delinquency rates, which is what really can pull the rug out from a market and make it go from a correction to a crash, actually not that bad.
It’s not even not bad. It’s very healthy at 1.7%. That is very, very low. When you look at the Northeast now, you sort of have to do a little bit of a balancing act, right? Those markets have low inventory, prices have been moving up, but by the fact that we are seeing rising delinquency rates in the Northeast, that is a counterbalance to some of those tailwinds. We are now seeing that that’s why I believe a lot of these markets are going to start to slow down. We’ll probably see more and more inventory come on the market because there are delinquencies. It’s not going to be emergency. It’s not going to be a flood. This is just downward pressure on pricing. The third category that we’re entering in is the Southeast. These are areas where we have rising inventory. Prices fell fast. We have relatively low affordability, and now we’re seeing rising delinquency rates.
That worries me a little bit, especially in the context of AI and the job market. Now, we don’t know if there’s going to be a lot of job loss. That hasn’t happened yet. But to me, the Southeast still poses a lot of risk. I know that Zillow is saying that a lot of those markets are going to flatten out and they’re going to be just fine. I worry about markets where delinquency rates are well above the national average and there is relatively low affordability. That worries me. If you’re in the Southeast personally, I would be very careful investing right now. I think there’s going to be better deals on the market, which is a plus and that’s something you can work with. But I think the risk of declines in the Southeast personally is bigger than what Zillow is saying they are. I also think that the upside in the Northeast is a little bit lower than Zillow is saying they are.
They’re saying markets there two, three, 4%. If some of these trends continue, low affordability, higher delinquency rates, rising inventory, I think they’re going to be mostly flat. I’m not saying they’re going to crash, but I think these markets where they’re projecting three, four, 5% appreciation, maybe, but I would personally err on the side of caution and assume they are going to be closer to flat if it were me. So if you’re in a market with rising inventory, rising delinquencies and low affordability, that’s the biggest risk category. So go look those things up for yourself. That is the biggest risk category. If only one or two of those things are trending the wrong way, I think you’re going to probably be closer to flat. And if all of those three things are trending the right way, you’re probably in a market that’s going to appreciate. That’s sort of how I would look at these things.
There is one more thing I want to talk about, which is homes being underwater, because this has increased pretty significantly over the last couple of years. And this is another factor you need to think about in your market. We’re going to talk about that right after this quick break. We’ll be right back.
Welcome back to On The Market. I’m Dave Meyer. Before the break, we talked about delinquency rates, but I want to tie in one more thing here, which is homes being underwater. Now, I don’t talk about that much on the show because I think delinquency rates and foreclosures are much better predictors of where prices are going than homes being underwater. I actually think people overestimate what homes being underwater does to the housing market because honestly, it might do nothing. If delinquency rates are low and your homes are underwater, it doesn’t matter because banks, they cannot foreclose on you just because you have negative equity. They only foreclose if you stop paying your mortgage. And when those two things combine, that’s the problem. If you are behind on your mortgage and then you have negative equity, that’s when you might see more supply come on the market because banks are forcing sales.
Now, we don’t know if banks are going to do that. I personally actually think that they’re going to take over these properties and actually operate them because that is a better financial decision for them. But I just want to call out in Florida, there are very high negative equity rates. Some markets are at 10%, 11%. In Austin and in San Antonio, we have 9%. In Colorado Springs, we have 5.6%. So it’s just another variable. Most of the other markets in the country, I actually really wouldn’t worry about. There are some places with 3%, 2%, but that happens during a housing correction. That is just one of the things that happens is when prices go down, more homes have negative equity. As long as people are paying their mortgages, that doesn’t really matter. But when you look at the big picture, when I’m looking at all this data and I see Austin, San Antonio, a lot of Florida with these huge negative equity rates, rising delinquency rates, low affordability, I worry.
I think those markets are in for another bad year. But just remember, this is just the minority of markets. If you look at California, it’s super low. The Northeast, it’s super low. If you look in the Midwest, it’s super low. So it’s really concentrated, honestly, in a little bit of Louisiana, but Texas and Florida as well. So before we get into the conclusions, and I’ll share some of the riskiest markets, some of the highest upside markets I personally believe in, just remember, go look these things up for yourself. You can go on ChatGPT, double check it, but you can go Google these things as well. Look at affordability in your market, delinquency rates, the way inventory is trending and negative equity rates. Get a picture of what’s going on. If it’s a mixed bag, probably going to be flat. If it’s all negative, prepare for better deals, but also declining home prices.
If everything’s going well, which is very, very few markets right now, you can prepare and plan on appreciation. So depending on where you fall in that spectrum, if you’re in a market that is declining, if you’re in Florida or Texas or Louisiana right now, absolutely can still invest. You’re going to see better deals. And I actually think this is one of the more straightforward investing propositions right now. Buy well below current comps. There are going to be a lot of motivated sellers. And if you can buy five, 10% below market comps in some of these markets, that’s probably a good buy because a lot of these have strong long-term fundamentals. If you look like markets like Austin or Tampa, they’ll probably recover, but it might be a couple of years. So if I were you, the way I would, if you were looking at rentals, I would look at buying well, being very patient, buying 10% below current comps and buy great assets in great locations because those are going to recover quickest when these markets eventually do turn around and they will.
But I would not underwrite with appreciation this year or next year at a minimum. I would say maybe 2028, I would start to show modest appreciation and I would keep those appreciation rates going forward at two or 3%. I would not expect some huge massive rebound. If you get that, great that you are positioning yourself for that upside, which is awesome, but I wouldn’t bank on that in your underwriting. If you’re in the flat markets, I honestly think this is a little bit harder because it can be tempting to go after a thin deal. And the sort of downside of being in a flat market right now is that deals are still pretty hard to come by in a lot of these areas, but I would still recommend caution in these markets. You still have to buy below current comps. I think that’s true in pretty much any kind of market.
I wouldn’t say you need to get 10% below market comps, but if you can get below three to 5%, that is the way I would try and insulate myself against this correction right now. And again, still focusing on great long-term assets. Now that’s just if you’re in a market with strong long-term fundamentals. These are markets that are going to keep growing. They have strong economies. They have population growth. If you’re in a market that’s flat and has a kind of meh economy, that’s not bad, but I would focus one more on cashflow because those markets may not appreciate at the same rates going forward. Even after the market returns, I would say in those kinds of markets, I’m thinking of market, I’m going to just call out Cleveland. It’s not a terrible market. It’s kind of flat right now, but appreciation rates might not go up to where they were two years ago or three years ago or four years ago in the next couple years.
They might not go up there ever again. And so I would prioritize cashflow in these markets that are kind of flat without long-term appreciation prospects. I would need at least a seven, 8% cash on cash return to do those kinds of deals. But again, if you’re in a market that’s kind of flat, but it’s a great fundamentals market, I’d say four or 5% cash on cash return if you think that market is going to appreciate long term. So that’s kind of my advice. If you’re in a market where things are going really well, you’re going to have less deal flow. You can still buy and forecast a bunch of appreciation, but I would not project that to continue forever at the rates that they are at today. I just think there’s going to be negative pressure everywhere in the market and you want to account for that.
So that’s why I recommend you do your research, look at the data I shared with you, and then there’s some advice on tactically what you should be doing in your market. But I did also want to share with you what I think the riskiest markets are right now. I’m just calling out a couple of them. To me, when I did this research, Austin, Texas, Punta Gorda, Florida stand out as the most risky markets right now. Tampa as well, Ocala, Florida, and Colorado Springs. Those are markets where things just don’t seem to be going well. I don’t know if they’re going to go down another 2% or another 10%, but I do not expect appreciation or rebounds in any of those markets this year. I’ll also call out Asheville, North Carolina, super strong, fundamentally strong market, but they had some flooding events there. Inventory is up really high.
And so I think declines are going to continue there as well. On the positive side, I do think there are some comeback markets, markets that were not doing that well that I think are probably going to have a better year this year. First, I think Reno, Nevada, we did see price go down a little bit less than 1% last year. They’re 6% off their peak in 2022, but I think that market has found a bottom. We’re seeing inventory falling. It is 26% below 2019 levels. There’s a lot of momentum towards places that have zero income tax like Nevada. And so I think that market is going to stabilize. Another market I see stabilizing this year is Mobile, Alabama. Prices did fall 2% last year, but inventory sort of peaked and is starting to fall again. It’s 16% below 2019 levels. And now I think we are going to see that market start to flatten out.
The number one comeback market of the year, I believe, is going to be San Francisco, California. People always love to bet advance California, San Francisco, New York. They’re both performing really well right now. I think this is going to turn around. Prices are actually down. It’s 2.6% year over year. It had one of the biggest corrections in the country last year. They’re down 9% off of the 2022 peak. But if you just look at the changing inventory dynamics there, it is falling quickly. You have all this money pouring into the area with AI enthusiasm. I think that we are going to see a rebound in San Francisco. That’s my guess for the comeback market of the year here in 2026. So that’s what we got for you today. Hopefully this helps you do your own research for your markets. I can’t talk about all 300 major metro areas in the country.
I’ve given you some insights into regional trends, but go Google this stuff. It will take you five to 10 minutes. Look up inventory, affordability, delinquency rates, price trends, negative equity in your market, and make an assessment. How risky is your market? What is the upside? When’s that upside coming? And base your investing decisions on that. Overall, I think there is probably more negative pressure on housing prices than there is positive pressure in the market. I think even the markets that are going to go up are probably going to go up at a slower pace than they did last year. The markets that were flat last year will probably go down a little bit. That’s just generally speaking how I’m approaching my own investing. And to be a conservative investor, that’s what I recommend you do as well. Thank you all so much for listening to this episode of On The Market.
I’m Dave Meyer. I’ll see you next time.