Because the climate cools heading into late fall, so does the U.S. housing market, with Florida main the nation in metros experiencing the steepest dwelling worth declines.
A latest report from actual property analytics agency Cotality revealed that of the ten coolest markets within the U.S. among the many 100 largest metros, seven had been in Florida.
Cape Coral, FL, a metropolis of 32,000 famend for its scenic canals, stood out for recording Florida’s largest year-over-year drop in dwelling costs in September—and the second-highest total, behind Champaign, IL—falling 7.1%.
Subsequent on the listing was Naples, FL, the place dwelling costs fell 6.7%, adopted by Punta Gorda, FL (-6.2%), Sebring, FL (-5.2%), North Port, FL (-5.1%), Brownsville, FL (-4.8%), and Sebastian, FL, which rounded out the highest 10 with a 4.6% decline. Notably, Wichita Falls, TX, and Kahului, HI, ranked eighth and ninth, respectively.
“These cities are largely retirement and second-home locations, so there’s not a lot enterprise or business coming into these areas outdoors of tourism that generates jobs and retains the financial system going, so wages are decrease and also you don’t have individuals relocating to this space for jobs, therefore much less demand for getting in addition to renting,” Cara Ameer, actual property dealer at Coldwell Banker Vanguard Realty in Florida, tells Realtor.com®. “All of this creates an ideal storm for a decline in property values.”
In August, the standard single-family dwelling in hard-hit Cape Coral bought for $350,000, down practically 7% from the earlier 12 months, in accordance with the most recent accessible information analyzed by Realtor.com researchers.
In contrast with August 2022 throughout the pandemic increase period, when mortgage rates of interest had been close to historic lows and demand surged, the median dwelling gross sales worth in Cape Coral has dropped by greater than 13%.
In the meantime, the standard dwelling in North Port bought in August 2025 for 20% lower than three years in the past.
Cape Coral continues to wrestle
A mixture of nationwide and native elements has been fueling Cape Coral’s downward pattern, as rising dwelling financing, greater insurance coverage premiums, and rising foreclosures charges curbed purchaser curiosity.
Town’s location on the Gulf Coast leaves it weak to hurricane harm and flooding, making it each harder and costlier to safe dwelling insurance coverage.
In truth, Cape Coral has the nation’s third-highest premium-to-market ratio of two.2%. This metric measures how a lot a house owner is paying in insurance coverage premiums annually relative to the market worth of their dwelling.
For instance the proprietor of a $350,000 dwelling in Cape Coral must put aside $7,700 to cowl their annual insurance coverage premium.
Ameer says that though Florida doesn’t have a state revenue tax, the financial savings are often not important sufficient for lower-income residents to offset the rising prices related to proudly owning property in these coastal areas affected by surging insurance coverage prices, and better HOA and rental charges.
“Florida is beginning to turn out to be lopsided in property values on account of these sorts of shifts,” she says.
Individually, Cape Coral earned the doubtful distinction of getting the third-highest foreclosures charge amongst 225 metros with a inhabitants of all least 200,000, in accordance with the Q3 2025 report from ATTOM, a curator of land, property, and actual property information.
Nevertheless, Karen Borrelli, president of Royal Palm Coast Realtor Affiliation and agent at John R. Wooden Christie’s Worldwide Actual Property, tells Realtor.com that whereas the variety of foreclosures and quick gross sales in Cape Coral are up in contrast with final 12 months, the info doesn’t counsel that there’s “a catastrophe looming in entrance of us,” she says.
Coastal markets are seeing an overcorrection
However these metrics don’t seize the total image in the case of Florida’s distressed markets like Cape Coral, North Port, and Naples. Specialists and actual property brokers agree {that a} key issue placing downward stress on costs in these metros is overcorrection from the overheated pandemic years.
“Speedy worth development, mixed with more and more expensive and difficult-to-obtain insurance coverage, and rising mortgage charges, pushed many would-be patrons out of those Florida markets,” says Realtor.com senior financial analysis analyst Hannah Jones. “As affordability deteriorated, demand weakened and costs started to appropriate.”
In different phrases, as Borrelli places it, the market “went up too excessive, too quick,” leaving many patrons priced out, and it’ll take time earlier than they return in full power.
Costs in lots of Florida markets have been easing 12 months over 12 months since 2022, signaling that they’re present process what Jones calls “rebalancing” as sellers seek for a worth level that attracts patrons again.
“This correction is prone to proceed till demand strengthens sufficient to stabilize costs,” provides the analyst.
Borrelli factors out that the cooling noticed in Cape Coral’s housing market is restricted to dwelling costs, not the variety of gross sales.
“The patrons are nonetheless coming right here,” she says. ”They’re nonetheless buying. Our gross sales are nonetheless persevering with at nearly the identical charge 12 months over 12 months. What’s cooled is the pricing. And now that the pricing is extra reasonably priced, it appears to draw simply as many patrons.”
Borrelli provides: “It is really in all probability a very good time to purchase.”
As for sellers in Cape Coral, the agent says they nonetheless have “unrealistic” pricing expectations reminiscent of the red-hot COVID years.
“And so these homes have a tendency to sit down as a result of the patrons are searching for worth,” says Borrelli. “They know a home that is priced nicely from an overpriced dwelling.”
Sellers throughout Florida have responded in numerous methods to sluggish purchaser curiosity: Some are providing concessions, whereas others—notably in Miami—are selecting to delist and await higher market circumstances.
Within the spring, a few third of all for-sale properties in North Port, recognized by Cotality because the nation’s sixth-coolest market, got here with a worth reduce. Cape Coral was shut behind with 28% of listings.
Trying forward, Borrelli says she consider the basics of the native housing market stay robust and the pricing will finally discover its footing.
“I believe we’re getting to a degree the place the worth is there for our homes, and individuals are seeing that worth,” she says. “And so long as that continues to be, I see costs being regular.”
