Florida leads the nation in steep home price declines as the U.S. housing market continues to cool. A report from real estate analytics firm Cotality found that of the 10 “coolest” markets among the 100 largest U.S. metros, seven were in Florida.
Cape Coral posted the state’s largest year-over-year drop in September – and the second- steepest decline nationally behind Champaign, IL – falling 7.1%. Naples followed -6.7%, then Punta Gorda (-6.2%), Sebring (-5.2%), North Port (-5.1%), Brownsville (-4.8%), and Sebastian , which rounded out the top 10 with 4.6% decline.
“These towns are largely retirement and second-home places, so there is not much business or industry coming into these areas outside of tourism,” said Cara Ameer, a real estate broker Coldwell Banker Vanguard Realty in Florida. “Wages are lower and you don’t have people relocating to this area for jobs, hence less demand for buying as well as renting.”
According to the latest available data analyzed by Realter.com researchers, the median price of a single-family home sold in Cape Coral for $350,000 – down 7% from the previous year.
Home prices in the area are down more than 13% from August 2022, during the pandemic peak when mortgage rates were at historic lows.
Insurance and financing raise an issue in Cape Coral
Home insurance on Florida’s Gulf Coast has become difficult to secure due to flood and hurricane risks. Rising borrowing costs, higher insurance premiums, and elevated foreclosure rates have only dampened buyer interest.
Cape Coral now has the nation’s third-highest premium-to-market ratio of 2.2% – a measure comparing annual insurance premiums to a home’s market value. A homeowner with a $350,000 property must set aside $7,700 a year for insurance alone.
Ameer notes that although Florida has no state income tax, those savings are often insufficient for middle- and lower-income residents facing soaring insurance bills and rising HOA and condo fees.
The metro also recorded the nation’s third-highest foreclosure rate among 225 metros with a populations of at least 200,000, according to ATTOM’s Q3 2025 report.
Florida’s overcorrected market
“Rapid price growth, combined with increasingly costly and difficult-to-obtain insurance, and rising mortgage rates, pushed many would-be buyers out of these Florida markets,” said senior economic research analyst Hannah Jones.
Analysts claim that the state is now navigating an overcorrection from the pandemic boom years. Since 2022, sellers have been adjusting list prices in an effort to attract buyers and “rebalance” the market.
Pricing remain elevated after the pandemic, but asking prices are gradually declining, making homes more accessible. In North Port, a third of all for-sale homes saw price cuts; in Cape Coral, 28% of listings followed.
Borelli expects the market to continue normalizing. “I think we’re getting to a point where the value is there for our houses, and people are seeing that value,” she said. “And as long as that remains, I see prices being steady.”
