The longtime mantra of the real estate market, “location, location, location,” may never have been so true.

During the COVID-19 pandemic, a national frenzy seemed to permeate the housing market as buyers spent previously unimaginable sums on homes just about everywhere. The real estate market was fairly monolithic as the number of available homes dried up and prices shot up around the country.

However, what’s happening in the national housing market might no longer resemble what’s going on in local markets across the country. As mortgage interest rates have risen, some markets have slowed down while others have continued to speed up. Home prices may be falling in one city but accelerating in another. Bidding wars can be fierce in one neighborhood, while homes are struggling to find buyers in the next one over. The real estate market is again all about location.

“In the [early] pandemic, it didn’t really matter where you were. The housing market was thriving and growing,” says Ali Wolf, chief economist of the building consultancy Zonda. “Since interest rates have risen and inflation is higher and economic uncertainty abounds, we’re reverting back to very localized housing markets. It depends on where you are to know if the market is doing well or the market is slowing down.

“There is no national housing market,” she continues. “Every single city and every single street across the country has its own unique housing market.”

There is one big caveat, however. The housing shortage has complicated the market in that buyers are still willing to pay a premium for charming, move-in ready homes in walkable communities with good schools that are near big cities. That is the same whether a home is located in Austin, TX, where prices have fallen, or Miami, where prices are still increasing year over year.

There simply aren’t that many well-located, turnkey homes for sale, so when one of these properties becomes available, the competition is fierce.

“Regardless of where you are, a great home is still a great home and it will still sell,” says Wolf.

Regional housing markets where prices are rising and falling

However localized housing has become, there are still significant regional trends. And the housing correction is hitting certain parts of the country much harder than others.

Case in point: Real estate markets in the Northeast, Midwest, and the Southeast, in particular Florida, are holding up the best, especially in smaller cities where prices are lower.

“The Midwest is still full of affordable markets,” says Selma Hepp, chief economist of the real estate data firm CoreLogic. “It’s much more steady than these coastal markets where you have large swings in home prices.”

The housing market is weaker in the more expensive parts of the country, such as the West. Home sales in states like California, Idaho, Nevada, and Washington have been affected more by the rise in mortgage rates. The higher rates plus high prices are causing buyers to hit their financial limits. As something has to give, prices in some markets are leveling off or falling.

“Mortgage rates made a huge difference: People lost 30% in purchasing power,” says Hepp.

Plus, many of the areas that experienced the largest price increases during the pandemic, like Austin, TX, and Phoenix, have been cooling off.

“We should expect some price corrections, not price crashes, in these places where prices run up the fastest,” says Lisa Sturtevant, chief economist of Bright MLS. The multiple-listing service covers the mid-Atlantic region.

The Cities vs. the suburbs

Even within a thriving metropolitan area, the strength of the local real estate market may depend on exactly where buyers are looking—all the way down to an individual neighborhood or even block.

For example, home prices have dipped in the downtowns of some big cities, like Philadelphia and Baltimore, the part of the cities where prices are often the highest, says Sturtevant. But bidding wars continue just outside the city limits in many close-in suburbs.

Buyers who are priced out of urban downtowns might turn toward smaller cities or close-in suburbs that boast short commutes, bustling Main Streets, and good schools. Since there is typically limited land available in these towns on which to build new homes, competition among buyers remains fierce. That’s led to rising prices, even while just a few miles away in bigger cities, prices may have fallen a bit.

Then there are the exurbs, the outer-edge suburbs that are the farthest from the bigger cities. Their future is a bit more uncertain.

Buyers looking for larger homes on more property can often find the cheapest real estate in these areas. As buyers are feeling the financial squeeze, that’s likely to keep demand—and therefore prices—strong in these areas.

However, these were also the areas that were popular with investors during the pandemic. Many investors aren’t buying as much real estate these days.

Even within the same town, certain neighborhoods are likely to be more desirable than others. Some offer larger homes on bigger lots, others may be closer to town. Then there are those that aren’t considered as trendy or that offer fewer amenities. A home in a popular neighborhood might receive 10 offers, while just a few blocks over a property on the market might receive none.

“For home shoppers, it’s good to be aware of national trends,” says Danielle Hale, chief economist for Realtor.com®. “But those national trends might not match the homes that they’re shopping for at the prices they’re looking at in the neighborhoods they’re searching in.”