A few years ago, life in America’s “Zoomtowns” seemed golden. The Sun Belt was booming, home listings sparked bidding wars and cash-flush buyers from New York and San Francisco were snatching up properties in Austin, Tampa and Phoenix like it was a race.
But the tide has turned, and fast.
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The same cities that once symbolized freedom and affordability for pandemic-era movers have become cautionary tales. Homes are sitting longer. Prices are falling. And sellers, once cocky, are cutting deals just to get out.
A new Parcl Labs report shared with Business Insider reveals that sellers in the southern half of the U.S., from Texas and Tennessee to Florida, are now the most “motivated” in the nation — a polite way of saying they’re desperate (1). Meanwhile, the Midwest and Northeast are quietly winning today’s housing game.
From pandemic highs to price-cut lows
“Zoomtowns” got their name during the pandemic boom when remote workers fled pricey coastal hubs for cheaper, sunnier cities. Homeownership rates rose from 64.6% in 2019 to 65.8% in 2022, with most gains driven by younger households (2). Metros like Austin, Tampa, and Charlotte saw significant influxes of newcomers.
When the migration frenzy cooled and mortgage rates spiked, all that new supply collided with dwindling demand. Austin’s home values have dropped about 20% from their 2022 peak (3). Dallas and Tampa have seen similar reversals, raising questions that once-feverish “sold over asking” markets are becoming clearance racks.
While the South cools, northern markets that were overlooked during the boom are heating up. Buffalo and Milwaukee, and even places like Cleveland and Detroit — once dismissed as slow-growth cities — are now seeing rising prices and quick sales.
Net migration to the South is down almost 40% compared to the pandemic’s first year. The Midwest, by contrast, is seeing a modest rebound in population retention. In other words: the boomtown baton has passed.
A new buyer–seller dynamic
In the South and West, sellers are finally “meeting reality,” Parcl Labs executive Lucy Ferguson said to Business Insider. Parcl’s Motivated Sellers Index — which tracks price cuts, listing time, and discount size — shows elevated desperation across Sun Belt states. Counties in Texas, Florida, and Tennessee top the list (1).
Buyers in the South suddenly have leverage they haven’t seen in years. More listed homes, longer listing times, and frequent price drops mean buyers can now really negotiate, which was unheard of during the pandemic.
Meanwhile, in the Midwest and Northeast, the opposite is true. Limited supply and stable demand have created a seller’s market. Homes in Buffalo and Boston are moving fast, often with multiple offers (4). Sellers there can still call the shots.
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But nationally, both sides are caught in a stalemate. Millions of homeowners are locked in with 3% mortgage rates, unwilling to sell and take on new loans at 7% (5). Renters, too, are waiting for affordability to return. The result: a frozen market where little inventory moves unless someone blinks.
A Zillow analysis from May illustrates the new trend: Buyers in Northeast cities are battling up to 10 rival offers per home, while sellers in once-hot Sun Belt markets sweat through negotiations (6).
“The salad days of multiple offers are over,” Tampa-based broker Michael Lauer told CRE Daily. “Beautiful homes still sell, but everything else is a grind” (5).
What this means for you
If you’re thinking about buying, the current divide is your chance to get picky, especially in the South and Rocky Mountains regions. Market conditions in places like Austin, Tampa and Denver mean buyers can score better deals or even negotiate closing credits. But this doesn’t currently qualify as a crash. Most of these cities’ populations are still growing, just more slowly.
"In a lot of these markets where home prices are kind of flat to lower, I don’t exactly see a reason why all of a sudden home prices are going to reaccelerate meaningfully," Ryan McKeveny, a managing director at the housing research firm Zelman, told Business Insider (1).
Even in a buyer’s market, the “perfect” home can still spark a bidding war. When a property checks every box — great location, updated finishes, fair price — you won’t be the only one who notices.
Buyers should move fast but smart. One thing to consider is getting pre-approved for a mortgage so you can make a strong, clean offer without financing delays. Study recent, comparable property sales to avoid overbidding out of emotion. Flexibility helps, too: Agreeing to a quick close or being lenient on repairs can stand out more than adding a few thousand dollars to your offer. In a cooling market, the smartest offers — not just the highest — may be likelier to win.
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Article Sources
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Business Insider (1); U.S. Census 2); (3); Zillow (4); CRE Daily (5); Zillow (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.