These three housing markets are poised for a huge drop in prices - and they are not in Florida or Texas

Home values in the US are at record highs - but that could all change soon, according to a new report. 

A house price crash is a risk in more than 50 counties across the America, researchers from property-data firm Attom found. 

That is great news for first time buyers but a blow for those who already own one and are benefitting from elevated prices.

Three states - California, New Jersey and Illinois - stood out as at-risk states. They had the most counties where home prices could crash based on key indicators.

These include high numbers of underwater mortgages and foreclosures plus higher unemployment. Attom looked at 600 counties across the US that had enough data to analyze.  

'The housing market boom continues to gain momentum. However, some markets show signs of potential instability,' Attom chief executive Rob Barber said.

'With the housing market still facing challenges, it’s crucial to closely monitor regions where key indicators suggest a higher likelihood of issues,' he said of the report.  

The New York City metropolitan area also had a big cluster of markets at risk. 

The metropolitan areas around New York and Chicago, as well as broad stretches of California, had 24 of the 51 counties considered most vulnerable. 

The most at-risk counties included three in New York City (Kings County, which covers Brooklyn, Richmond County, which covers Staten Island, and Bronx County) and four in the New York City suburbs (Essex, Passaic, Sussex and Union counties, all in New Jersey). 

There are four counties in Illinois - Cook, Kendall, McHenry and Will - and Lake County in Indiana.

Another 12 were in California: Butte County (Chico), Humboldt County (Eureka), Solano County (outside Sacramento) and Shasta County (Redding) in the northern part of the state.

Plus in central California there is Kern County (Bakersfield), Kings County (outside Fresno), Madera County (outside Fresno), Merced County, San Joaquin County (Stockton) and Stanislaus County (Modesto) in central California. 

Two others, Riverside and San Bernardino counties, are in southern California.

House prices already falling

Several housing markets in the Sun Belt that became pandemic boomtowns have already faced price corrections. 

The number of homes being listed for sale in former hotspots such as Fort Worth, Texas, and Tampa, Florida, have shot up in recent months. 

Both cities are seeing values drop year-on-year, according to recent data from Redfin. 

Austin, Texas and Cape Coral, Florida saw the biggest drops in prices over the last year, according to the American Enterprise Institute's Housing Center.

Other Florida hotspots - such as Lakeland, Tampa and Crestview - are also experiencing a real estate downturn as residents attempt to sell-off their condos. 

Condo owners are slashing prices by up to 40 percent as they strive to dodge massive incoming repair costs.

Some units have had almost half a million wiped off their asking price as safety fears trigger a wave of sell-offs in what realtors have described as the worst real estate crisis in decades.

State legislation brought in following the 2021 collapse of the Champlain Tower South in Surfside, Miame-Dade County, which killed 98 people, means hundreds of thousands of condo owners must now fork out hefty sums for previously neglected maintenance.

Many could face fees greater than their mortgage payments, sparking a wave of distressed sales. 

Home shoppers may wish to take advantage of softer markets as down payments have crept to an all-time high. 

The average down payment for US homebuyers is now a staggering $67,500, new data revealed.

Elevated mortgage rates mean homebuyers are incentivized to put down more money upfront to soften the blow.

This, alongside rising house prices, means down payments over $400,000 are now the norm in some American cities.

Down payments have also increased in percentage terms, the analysis from Redfin found.

The typical homebuyer put down 18.6 percent of the purchase price of a home in June, which is the highest level in over a decade and up from 15 percent last year.