Pandemic hotspots, where home prices shot up thanks to out-of-towners with deep pockets fleeing more expensive locales, are now seeing prices rapidly decline, according to a Redfin report released today.

Home-price growth has slowed most markedly in the fastest-growing pandemic boomtowns, including Austin, Texas, Phoenix and Boise, Idaho, “as high mortgage rates and the uncertainty of the economy deter would-be buyers,” the Seattle-based real estate brokerage reported.

Both Austin and Phoenix experienced 23% price drops between February and October—the most dramatic among the 99 most populous U.S. metros. “We compared October to February because in many U.S. metros, that’s when the housing market was near its peak in terms of demand and competition,” Redfin said.

“The forces slowing the housing market, such as high mortgage rates, are having an outsized impact on places like Austin and Boise that saw home prices skyrocket over the last few years,” Redfin Senior Economist Sheharyar Bokhari said.

The findings follow news last week that investor purchases of single-family houses plunged 32% in the third quarter, Redfin found. Except for the onset of the pandemic in early 2020, this was the steepest percentage plunge since the housing bust beginning in 2008, the firm reported.

“Home prices can only rise by double digits for so long before the growth becomes unsustainable,” Bokhari said. “High rates and stumbling tech stocks are making it unsustainable quite quickly, especially in destinations popular with tech workers. Plus, many of the out-of-towners with big budgets who wanted to move into those places already have.”

Austin’s median price-per-square foot fell to just over 1% growth in October. But that’s a dramatic decrease from the 24% price growth year over year the boomtown was experiencing in February, when mortgage rates were still hovering under 4%, Redfin said.

In Phoenix, the second-hottest real estate market during the pandemic, price per square foot was up 6% from a year ago, but down from nearly 29% in February.

Las Vegas experienced a 21% drop in price growth per square foot, followed by Boise, and Oakland and Sacramento, Calif., where prices fell 20% between February and October.

Phoenix, Austin and Las Vegas were all among the metros that gained the most new residents in 2021, and Phoenix, Las Vegas and Sacramento all consistently rank on Redfin’s list of most popular destinations for homebuyers moving in from out of town, the firm reported.

“Boise and its suburbs have been among the fastest-growing cities in the U.S. over the last few years, attracting many new residents from California. Out-of-towners with big budgets helped drive up home prices in those popular destinations in 2021 and 2022. Home prices have increased more than 30% over the last two years in Phoenix, Austin and Boise, with the typical home now selling for nearly $500,000 in all three,” Redfin said.

Austin Redfin agent Maggie Ruiz the pandemic homebuying boom drove home prices up so significantly that the area has become unaffordable for many locals. She also noticed that migration into the Austin area and investment purchases are slowing significantly.

“Even though affordability is a concern, in many ways we are in a buyer’s market,” Ruiz said.

“Some first-time buyers finally have an opportunity to purchase a home without competing with out-of-towners and investors. Because prices and rates are high, a lot of buyers are offering below asking price, negotiating with sellers on a rate buydown, or considering new construction because many builders are offering significant incentives, including rate buydowns, to offload their inventory,” the agent added.

West Coast tech hubs have also seen price growth decelerate rapidly, Redfin found.

San Jose, Calif., Oakland and Seattle all made it onto Redfin’s top 10 list where price-per-square-foot ha fallen most dramatically. Median price per square foot fell about 2% in San Jose in October, down from 20% growth in February.

“Buyers in the ultra-expensive bay area and Seattle markets are feeling the sting of high mortgage rates and stumbling tech stocks even more than the rest of the U.S. That makes continued double-digit home-price growth unsustainable,” the firm said.

Meanwhile price growth is speeding up in some affordable East Coast and Midwest areas, according to Redfin.

For instance, “the median price per square foot was up 11.2% year over year in Albany, N.Y., in October, up from a 2.8% increase in February. That’s the biggest price acceleration of the metros in this analysis. It’s followed by Bridgeport, Conn., where price per square foot grew 7.5% in October, up from 4% in February, and McAllen, Texas,” which saw an 18.7% jump, up from 16.1% in February.

All five of the metros where price growth has accelerated this year as the nationwide housing market cools “are affordable places with relatively stable local markets,” Redfin said. Four of the five have median home prices below the national median, while Bridgeport is the exception.

“Prices in those places grew during the pandemic, but they didn’t skyrocket like much of the rest of the country, so there’s not nearly as much room to fall,” Redin said.

In additions, locales like Albany and McAllen “feel the impact of high mortgage rates less than other areas, as the lower the home price, the lower the dollar impact on monthly mortgage payments,” the company reported.