Property prices in many states sprawling across the Sunbelt have plummeted, sparking fears of a real estate market crash.

Seven states saw their housing markets lose value over the past year, according to data from Zillow. 

The biggest losses came in the Sunbelt, the warm southern region of the US stretching from California to the Carolinas. 

Florida saw the most significant drop - with a loss of $109 billion in total market value from July 2024 to June 2025, closely followed by California - which suffered a $106 billion decline. 

Texas also weathered a blow to its housing market, with a $32 billion loss.

Arizona and Georgia were among the states in the region to take a hit, though each only lost $1 billion in total market value. 

Outside of the Sunbelt, Hawaii's housing market lost $1 billion and the District of Columbia saw a $2 billion decline. 

The massive downturn in these housing markets can be attributed to multiple factors.

For one, natural disasters in many of the Sunbelt states means that insurance rates are sky-high. 

Homeowners in Florida pay the highest average annual premium of all the states ($2,437), and Texas is not far behind ($2,146), according to data from Insurance Information Institute. 

A growing condo crisis in Florida, in particular, has also led many Americans to desperately try to offload their homes.

Sunbelt states are also losing their affordability edge, as areas like Miami, Tampa and San Diego become too expensive to lure house hunters from across the country. 

A surge in Sunbelt real estate has meant that Americans moving to Florida or Texas are no longer saving as much annually than they were during the pandemic.

Wealthy New Yorkers who moved to Miami in 2023 saved an average of $88,036 - 28 percent less than the $122,956 they typically saved in 2019. 

Those who moved from New York City to Austin in 2019 would have typically saved $154,564, SmartAsset found, last year they saved $116,195 - some $38,000 less.

While states in the South and Mountain West became boomtowns during the pandemic and saw home values soar, states in the Northeast and Midwest are now taking over. 

New York, a Northeast state on the flip side of the housing panic seen in the Sunbelt, gained $216 billion in market value over the past year. 

This is by far the biggest increase of any state, and one quarter of the overall national growth in the past year, which was $862 billion. 

Other states that saw significant increases were: New Jersey ($101 billion), Pennsylvania ($73 billion), Illinois ($89 billion), Ohio ($49 billion), Michigan ($48 billion), Virginia ($46 billion) and Massachusetts ($46 billion).  

Despite the big hits being taken by Sunbelt states, the overall US housing market is worth a record $55.1 trillion - up $20 trillion since 2020. 

'Even as buyers struggled with rising costs, US housing wealth kept climbing,' said Orphe Divounguy, senior economist at Zillow. 

'New construction opened the door for many first-time homeowners, creating trillions in wealth that didn't exist five years ago,' he said. 

'Home value gains are a windfall for longtime homeowners, but they also highlight how housing deficits that sent prices soaring left behind many aspiring first-time buyers. 

'The bottom line is that we need more homes to solve our chronic affordability crisis.'

This time last year, it became clear that it was a great time to be a renter - particularly in Sunbelt states.  

Austin, Texas, and Jacksonville, Florida, saw average rents fall the most in the country last summer, according to new data from Redfin.

Developers paid attention to this trend, and over 500,000 of new apartments being built this year will be in Sunbelt states - and Thriving Texas metros, such as Dallas, Austin, San Antonio and Houston, are leading the apartment-building boom in the region

Experts say the boom highlights a growing shortage of affordable homes, which is pushing residents toward rentals - a demand developers are eager to meet.