Waves of concern are sweeping through the housing market as sellers are increasingly compelled to lower prices in an effort to entice buyers amidst dwindling demand.

Recent data from Realtor.com reveals that in February 2026, approximately 20% of homes in nine major metropolitan areas experienced price reductions. This trend signals a notable shift in the dynamics of the housing market.

Particularly affected are the pandemic-era hotspots, with the most significant price cuts occurring in former Covid “boomtowns.” These cities, once bustling with real estate activity, are now witnessing a substantial drop in housing prices.

Leading this trend is Phoenix, where a striking 28.2% of homes have been listed with reduced prices. Following closely are other cities such as Tampa, San Antonio, and Tucson, all showcasing similar markdown patterns.

What threads these cities together? They share a common past as vibrant centers of real estate growth during the pandemic, now grappling with a cooling market.

What do these cities have in common? 

They’re all sprawling, sun-soaked metros with room to grow – welcoming newcomers and offering everything from sleek condos to sprawling compounds. 

Price cuts were also widespread in the Jacksonville area, as well as in the Dallas–Fort Worth, Orlando, and Austin regions. 

Pandemic-era hotspots have been hit particularly hard, with all four leading markets for price reductions being former Covid ‘boomtowns’ (pictured: Phoenix, Arizona)

Phoenix took the lead in listings being marked down, with 28.2 percent of homes there carrying a price cut

Jake Krimmel, senior economist at Realtor.com

‘What jumps out is how geographically concentrated these markets are: three in Florida, three in Texas, and two in Arizona,’ said Jake Krimmel, senior economist at Realtor.com. 

‘Sellers there may be quick to cut because they know more listings are likely to come in in the spring, so competition among sellers will be heating up. It’s possible they’re trying to get out ahead of that and undercut others in order to get their home sold – perhaps so the sellers themselves can then turn around and buy their next home.’ 

Arizona stands out because, not only did the Grand Canyon State post the highest share of homes with price cuts, it also placed its largest two cities among the hardest-hit markets. 

Indeed, Phoenix and Tucson faired the worst, and there are a few key reasons why.

First, both markets exploded during the pandemic, drawing a surge of out-of-state buyers chasing lower costs and more space. 

That rapid run-up pushed prices to levels that are now proving hard to sustain as migration cools and affordability tightens.

Second, these are fast-growing, spread-out metros where builders were able to ramp up construction relatively quickly. 

Now, a wave of new inventory – especially new builds offering incentives – has given buyers more leverage and forced sellers to compete on price.

Arizona stands out because, not only did the Grand Canyon State post the highest share of homes with price cuts, it also placed its largest two cities among the hardest-hit markets

These are fast-growing, spread-out metros where builders were able to ramp up construction relatively quickly

Now, a wave of new inventory – especially new builds offering incentives – has given buyers more leverage and forced sellers to compete on price

Finally, higher mortgage rates have hit these markets particularly hard. 

Many buyers in Phoenix and Tucson are more rate-sensitive, and as borrowing costs climbed, demand pulled back sharply – leaving sellers to adjust expectations.

Put together, it’s a classic case of boom-to-correction: markets that rose the fastest are now among the quickest to reset.

‘I am seeing dramatic price cuts in Arizona,’ Arizona real estate agent James Sanson told Realtor.com. ‘The market is very quiet, and things are not selling, so sellers are trying to get into the lower bracket to sell their homes and increase the number of available buyers who can purchase them.’