20 U.S. Cities Where Real Estate Investors Are Losing Money

Investing in real estate has long been seen as a reliable path to wealth, but not every market is profitable. While some cities continue to see strong price appreciation, others are experiencing declining home values, slow sales, and major price reductions.

Ad

A new market analysis reveals 20 cities across the U.S. where real estate investors are earning the least due to factors like oversupply, weak demand, high vacancy rates, and economic downturns. For those looking to invest, these markets require caution and careful evaluation to avoid financial losses.

20 Cities Where Real Estate Investors Are Struggling

1. North Port, Florida – Market Saturation Causing Home Prices to Drop

• Average home price: $341,398

  
  

  Advertisement

• Homes sold below list price: 81.8%

• Median price cut: 2.9%

• Listings with price cuts: 29.1%

• Market analysis: North Port saw a surge in new housing developments, but now demand isn’t keeping up. Homeowners and investors are struggling to sell at profitable prices, forcing significant markdowns.

2. Punta Gorda, Florida – Overinflated Prices Leading to Corrections

• Average home price: $419,564

• Homes sold below list price: 81.2%

• Median price cut: 3.3%

• Listings with price cuts: 24.1%

• Market analysis: During the housing boom, prices skyrocketed, but buyer demand has weakened, leading to major market corrections. Investors are now selling at losses to attract buyers.

3. Athens, Texas – Weak Job Growth Hurting Real Estate Demand

• Average home price: $241,154

• Homes sold below list price: 79.7%

• Median price cut: 3.6%

• Listings with price cuts: 29.6%

• Market analysis: Athens lacks strong job growth, making it less attractive to homebuyers. Investors expecting steady appreciation are facing losses as demand remains weak.

4. The Villages, Florida – Market Oversupply in Retirement Community

• Average home price: $408,342

• Homes sold below list price: 78.5%

• Median price cut: 2.9%

• Listings with price cuts: 28.0%

• Market analysis: The Villages is a well-known retirement hotspot, but as more homes hit the market, competition has increased, leading to price cuts and slow sales.

5. London, Kentucky – Declining Demand and Economic Stagnation

• Average home price: $169,043

• Homes sold below list price: 79.4%

• Median price cut: 4.0%

• Listings with price cuts: 30.1%

• Market analysis: London’s economic growth has stalled, leading to fewer buyers and stagnant home values. Investors are struggling to find profitable exit strategies.

6. Somerset, Kentucky – Rental Market Challenges Leading to Price Drops

• Average home price: $184,404

• Homes sold below list price: 72.9%

• Median price cut: 3.7%

• Listings with price cuts: 28.8%

• Market analysis: With high rental vacancy rates, investors are cutting prices to offload properties that aren’t generating expected income.

7. Fort Madison, Iowa – Shrinking Population Hurting Housing Demand

• Average home price: $109,069

• Homes sold below list price: 72.5%

• Median price cut: 5.8%

• Listings with price cuts: 21.3%

• Market analysis: A declining population means fewer homebuyers, leading to low property appreciation and slower home sales.

8. Brenham, Texas – Post-Pandemic Price Correction

• Average home price: $315,304

• Homes sold below list price: 74.2%

• Median price cut: 4.1%

• Listings with price cuts: 24.9%

• Market analysis: Brenham saw a housing boom during the pandemic, but now prices are adjusting downward as demand cools.

9. Palm Bay, Florida – Oversupply Leading to Buyer Market Shift

• Average home price: $314,804

• Homes sold below list price: 70.0%

• Median price cut: 2.4%

• Listings with price cuts: 33.9%

• Market analysis: Palm Bay’s housing market is flooded with inventory, forcing sellers to drop prices to remain competitive.

10. Ponca City, Oklahoma – Economic Challenges Impacting Housing

• Average home price: $122,767

• Homes sold below list price: 70.1%

• Median price cut: 5.2%

• Listings with price cuts: 24.5%

• Market analysis: With limited job growth and economic instability, Ponca City is seeing reduced real estate demand.

11. Sevierville, Tennessee – Declining Short-Term Rental Demand

• Average home price: $379,462

• Homes sold below list price: 68.2%

• Median price cut: 2.1%

• Listings with price cuts: 35.5%

• Market analysis: Tourism-driven rental investments are not performing as expected, leading to falling property values.

12. New Orleans, Louisiana – High Insurance Costs Hurting Sales

• Average home price: $232,661

• Homes sold below list price: 67.3%

• Median price cut: 3.1%

• Listings with price cuts: 26.7%

• Market analysis: Soaring home insurance costs are deterring buyers, resulting in fewer sales and declining prices.

13. Burlington, Iowa

• Average home price: $119,022

• Homes sold below list price: 67.9%

• Median price cut: 4.7%

• Listings with price cuts: 25.5%

14. Lake Charles, Louisiana

• Average home price: $186,296

• Homes sold below list price: 66.3%

• Median price cut: 2.8%

• Listings with price cuts: 25.8%

15. Tampa, Florida

• Average home price: $396,438

• Homes sold below list price: 64.9%

• Median price cut: 2.4%

• Listings with price cuts: 33.8%

16. Austin, Texas

• Average home price: $550,856

• Homes sold below list price: 64.4%

• Median price cut: 2.7%

• Listings with price cuts: 31.6%

17. Beaumont, Texas

• Average home price: $151,005

• Homes sold below list price: 63.5%

• Median price cut: 3.7%

• Listings with price cuts: 24.2%

18. Wheeling, West Virginia

• Average home price: $138,989

• Homes sold below list price: 62.8%

• Median price cut: 4.4%

• Listings with price cuts: 27.0%

19. Alexandria, Louisiana

• Average home price: $128,998

• Homes sold below list price: 61.6%

• Median price cut: 3.3%

• Listings with price cuts: 27.0%

20. Houma, Louisiana

• Average home price: $185,437

• Homes sold below list price: 57.7%

• Median price cut: 3.5%

• Listings with price cuts: 22.5%

Why These Markets Are Facing Challenges

Several factors contribute to the difficulties investors face in these cities:

• Home values are declining or stagnating, making appreciation unlikely.

• A large percentage of homes are selling below list price, reducing resale profitability.

• High price cuts indicate a buyer’s market, where sellers struggle to attract offers.

• Certain locations have weaker job markets and lower population growth, affecting housing demand.

Investor Takeaway

For those considering real estate investment, choosing the right market is crucial. While these cities offer affordable properties, they also come with higher risks and lower profit potential.

Investors looking for better returns should focus on markets with strong economic growth, rising property values, and increasing demand. Carefully researching local trends and price movements before investing can help maximize profitability and avoid financial pitfalls.

Also Read: Powell Warns U.S. Mortgages May Become Harder to Get in High-Risk Areas