The residential housing market, so robust just months ago, has fallen on hard times. Home sales and prices had surged as mortgage rates dropped below 3% and people moved due to the flexibility of the “work from home” environment. Home prices have stopped rising in some markets. In a few, prices have started to fall. In several states, more and more sellers are cutting asking prices. The state where this is happening most is Arizona, where 40% of owners have made cuts.

The new What Goes Up Must Come Down: The Pandemic Era’s Hottest Markets Are Leading the U.S. in Price Reductions report from Realtor.com indicates that states with surges in prices appear to be the ones that have weakened the fastest. Arizona’s largest city, Phoenix, regularly showed up as the city with the largest increases most months, based on the S&P Case Shiller home price increase. In many months, the increase was 30% over the previous year. The Realtor.com study showed that Phoenix ranked third for price cuts after Boise and Austin.

The states with the most cuts on a percentage basis were clustered: “Seven of the top 10 states seeing the biggest increase in home price reductions are in a contiguous chunk of the western United States: Arizona, Nevada, Utah, Colorado, Idaho, Washington, and California.” This data was collected in October.

Arizona is where the largest portion of people have cut prices compared to the original list price. The percentage of homeowners who have done this is 40.4%. Next on this list is Nevada at 38.8%, followed by Utah at 32.3%.

Realtor.com also provided the median price of homes for sale. In Arizona, this was $465,000, which is well above the nationwide numbers.

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There is no housing crisis in America, or at least not yet. The last time home prices fell apart, in 2007, the reductions spread from state to state. Experts argue that will not happen this time. There are very few adjustable-rate mortgages given to people with poor credit. The economy is not in free fall, which caused unemployment to spike by over 8% in 2009.

Even if the housing market does not go into crisis, some states, led by Arizona, will challenge many buyers to get what they originally paid for their homes.

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