When Tourism Slumps, These 5 Real Estate Markets Start Talking to Savvy Investors

The tariff surge of early 2025 has reshaped America’s travel landscape in unexpected ways. Foreign visitor numbers took a serious hit—Canadian arrivals plummeted 31.9% and Mexican visitors dropped 23% in March 2025 alone, according to Oxford Economics. The U.S. tourism sector absorbed roughly $64 billion in losses, with recovery timelines stretched to 2029 at earliest. But here’s what most people miss: when international demand evaporates from resort towns, the market doesn’t collapse—it repositions. For property hunters, this means something rare: softening prices, climbing inventory, and sellers ready to negotiate.

The Buyer’s Advantage in Shifting Markets

The mechanics are straightforward. Tourist-dependent destinations saw their foreign customer base shrink, which loosened the grip on property values. Homes linger on the market longer. Inventory ticks upward. Negotiating power shifts decisively to the buyer’s side. Meanwhile, domestic tourism remains relatively stable, providing a floor under these markets. The result is a narrow window where investors can enter established coastal and destination markets before international tourism snaps back.

Reading the Numbers: Five Towns Worth Watching

North Myrtle Beach presents a mixed but buyable picture. Median prices climbed 3.4% year-over-year to $398,002 by April 2025, yet specific segments weakened—one-bedroom units dropped 5.4%, with two- and three-bedroom homes tracking downward. Inventory surged 6.3% from March, flooding the market with over 1,000 active listings. The telling detail: 87% of homes sold below asking price. Days-on-market stretched to 128 days. For patient buyers, this spells opportunity.

Gatlinburg tells a different story. The single-family median holds around $400,000, though premium cabins command $600,000-plus fueled by short-term rental appetite. Domestic tourism remains robust here, population growth is steady, and recent zoning flexibility is converting older motels into modern vacation units. New property investment keeps flowing in, attracted by rental yield potential and mountain aesthetics. This market is moderating rather than softening.

Dauphin Island bucked national softening trends through domestic strength and infrastructure improvements. The March 2025 median jumped 10.2% year-over-year to $490,000, with four-bedroom homes appreciating 18%. Inventory exploded—160 homes for sale represented a 52% monthly surge. Off-beach cottages trade 20% below comparable Gulf properties elsewhere. Homes move slower, prices flex more. It’s decisively a buyer’s market.

Girdwood operates on a different dynamic. The Alaskan town’s median sits at $445,350, and while property tax rates (1.26% effective) run above national averages—a consideration worth comparing against New York property tax structures in longer-term investment math—the town’s year-over-year price growth averaged 5.4% over a decade. Steady domestic adventure tourism, direct Seattle flights bringing West Coast buyers, and municipal tax incentives for rental upgrades through 2026 sustain demand despite tariff headwinds. Limited inventory keeps values supported.

Truro on Cape Cod experienced sharp segmentation. The median April price hit $944,500, up 4.7% year-over-year, but the composition shifted dramatically. Five-bedroom homes crashed 38% while one-bedroom units surged 50%. Inventory jumped 19% month-on-month. European summer rental bookings fell 12%, yet domestic occupancy stayed high. Recent flood-control infrastructure sparked buyer confidence. Sellers are flexible on terms. The market tilts decisively toward buyers preparing for the eventual tourism rebound.

The Investor’s Window

These five markets share a pattern: tariff-driven international tourism decline has created temporary softness, rising inventory, and seller flexibility. Yet domestic demand provides stability. Most significantly, experts peg full recovery around 2029—meaning investors have roughly three to four years to position before international visitors return and prices normalize upward. The markets aren’t collapsing; they’re pausing. That pause is the opportunity.