Sun Belt holds long-term housing edge even as pandemic boomtowns struggle

The U.S. housing market is telling two very different stories as pandemic-era boomtowns are cooling rapidly while the Sun Belt’s long-term growth outlook remains strong, according to John Burns Research & Consulting.

A surge in available homes is reshaping the market in regions that saw the fastest growth during the COVID-19 pandemic.

Nationally, the number of resale homes on the market in April climbed 21% compared to a year ago. The increase varies by region — up 53% in the Southwest but just 16% in the Midwest.

The report points to pre-pandemic inventory as a clearer measure of pressure:

• North Florida: Currently has 38% more resale homes than in April 2019
• Texas: 37% more homes
• Southwest: 23% more homes

These regions are also where prices are softening.

In Austin, there are 91% more homes for sale than in 2019, and prices have dropped 2% year over year. By contrast, Orange County, California, has 41% fewer homes for sale than in 2019 — with home prices there rising 5%.

Builders are feeling the squeeze too.

In oversupplied areas like Texas and Florida, new-home inventories are at their highest levels since 2010 and price are falling, according to John Burns. In response, the report shows that builders are slowing construction activity to match weaker sales.

Sun Belt’s job, population growth remain strong

While supply is driving current market trends, the long-term picture hinges on where people are moving and where jobs are growing.

Domestic migration continues to favor Sun Belt cities.

Jacksonville, along with the North Carolina hubs of Charlotte and Raleigh-Durham, remain as top destinations while traditional coastal hubs like Los Angeles, New York and Chicago are losing residents. But international migration has helped offset these losses.

Employment trends reinforce this divide:

• Northern Florida: +1.4% annualized job growth in April
• Texas: +1.3%
• U.S. average: +1.2%
• Southwest: +0.1%
• Southern California: 0%

Sun Belt metros have surpassed their pre-pandemic employment levels. Dallas is up 11% compared to pre-COVID peaks. Meanwhile, San Francisco’s job base remains 2% below pre-pandemic levels.

Oversupplied today, poised for growth tomorrow

Some markets may look weak now, but their long-term prospects remain bright.

“(In Austin, Texas), home prices are falling now due to oversupply. But the city’s population grew by 2.4% in 2024 — three times faster than the national average,” the report notes.

Similarly, Orlando’s housing market has cooled, but job growth is nearly double the national rate — suggesting the city’s future housing demand will rebound.

“These contradictions highlight why a longer-term perspective is essential for identifying opportunities,” the report explained. “The strong demand fundamentals (jobs and population growth) that drove Sunbelt growth during the pandemic haven’t disappeared — they’re just temporarily overshadowed by a supply glut.”