Where Home Values Dropped Most in the U.S.: A 2020 Market Analysis

While the U.S. housing market is generally hot, home values fell significantly over the past year in specific zip codes across Brooklyn, San Francisco, Portland, and other areas impacted by the pandemic, remote work migration, and local crises. This analysis of median home values—the estimated market value of all homes in an area, not just those that sold—reveals that the most substantial declines were concentrated in regions affected by wildfires, civil unrest, and a loss of tourism or urban appeal.

What Drove the Nation’s Sharpest Home Value Decline?

The most significant drop occurred in Paradise, California (zip code 95969), where the median home value fell 20.5% year-over-year to $136,000 in October 2020. This decline is directly linked to the aftermath of the 2018 Camp Fire, which destroyed thousands of homes. The pandemic further halted rebuilding efforts. As Redfin chief economist Daryl Fairweather noted, "Most of the properties for sale right now are empty lots where homes used to be. The devastation caused by past fires and the looming threat of future wildfires are causing buyers to look elsewhere."

Which Other Metro Areas Experienced Notable Value Drops?

Beyond Paradise, several metropolitan zip codes saw values recede. In downtown Portland, Oregon (97201), values declined 7.5% to $427,000. Local Redfin agent Nicole Arnold attributed this to a combination of factors: "The civil unrest combined with empty office buildings, closed restaurants and remote workers’ desire for large homes with a lot of outdoor space have caused home values to decline in the heart of downtown." Similarly, parts of New York City, including neighborhoods in Brooklyn and Queens, saw decreases. For example, values dropped 4.4% to $823,000 in Bedford-Stuyvesant/Crown Heights. The pandemic-driven shift to remote work motivated residents to seek more space in suburban or rural areas.

How Did Tourism and International Buyers Influence the Market?

Areas reliant on tourism or international buyers also felt a strong impact. Two zip codes in Sandusky, Ohio—one home to the Cedar Point amusement park, which was closed for months—saw values fall by 9.3% and 5.8%, respectively. In Flushing, Queens (11355), home to a prominent Chinatown, values dropped 4.2% to approximately $642,000. This decline was influenced by travel restrictions from China and difficulties for Chinese buyers in securing financing. Similar trends affected tourist-centric areas like downtown San Francisco, Waikiki, and the Las Vegas Strip.

Is the Trend of Urban Decline Continuing?

Based on our experience assessment, the decline in urban core values may not be permanent. By late 2020, some agents reported a resurgence of buyer interest. New York Redfin agent Martin Freiman observed, "I’m starting to see buyers regain interest in the city with the election behind us and promising vaccine news. Young people who want to be close to the action once the city reopens and empty nesters who are downsizing are taking another look at urban life." This suggests that market shifts driven by the pandemic may be fluid.

For homeowners and buyers, the key takeaway is that hyper-local factors—from environmental risks to changes in neighborhood demand—can significantly impact property values, even against a strong national market trend.