Headlines that call Cape Coral, Florida, the “worst housing market in America” and liken it to precursors of the 2008 financial crisis have garnered discussions across the real estate industry. But local experts and data suggest the reality is far more nuanced.
While a recent article from The Wall Street Journal highlighted falling home prices, empty open houses and investor pullbacks, agents who spoke with HousingWire think that the southwest Florida city is experiencing a natural market correction — not a collapse.
Pandemic-era growth unsustainable
Cape Coral saw a meteoric rise in home prices during the COVID-19 pandemic — driven by remote work, low mortgage rates and a migration wave from northern states.
According to Redfin, the median home sale price in the Cape Coral-Fort Myers metro area jumped nearly 75% from early 2020 to mid-2022, peaking at $441,000 in April 2022.
That surge made the area one of the fastest-appreciating housing markets in the country. A pullback was not only expected — it was inevitable.
“Yes, we have a lot of inventory and interest rates are high,” said Yisbel Bera, a Cape Coral-based agent with eXp Realty-affiliated Kingdom Group. “Now, there’s an adjustment that has to happen, because the prices between 2020 and 2022 were unreal and not sustainable for this area.
“It seems like 2025 is that correction year for us.”
Christine Blasses, an agent with Century 21 Selling Paradise, said that Cape Coral continues to maintain solid market growth.
“(2020-2022) is not a realistic baseline,” she said. “I think you should use maybe 2018 or 2019 as a realistic baseline. Because if you looked at the charts, we’re following a normal (annual growth) increase at between 5% and 8%, which indicates a normal market. But that spike in ’21 and ’22 was just an unrealistic market that no one could keep up (with).”
Inventory comparisons, insurance cost relief
Data provided to HousingWire by the Royal Palm Coast Realtor Association (RPCRA) and Florida Gulf Coast MLS (FGCMLS) shows Cape Coral’s available inventory sitting at 3,046 as of June. That compares to only 773 homes on the market in October 2021.
Karen Borrelli — the president of RPCRA and FGCMLS, and a Realtor with John R. Wood Christies International Real Estate — said that new construction is helping to bring down expensive homeowners insurance rates that have led to buyer apprehension.
“The (home prices) went up really fast during the pandemic and now they’re correcting, but it’s not a matter of the market being bad,” she said. “The state also has had a lot of new insurers entering the market, and people are actually getting lower quotes. The new construction is all up to code for flooding and everything else as opposed to older homes.”
According to RPCRA and FGCMLS, the June 2025 median home sale price for Cape Coral was $371,850 — up from $369,000 in October 2021. These figures amounted to sale-to-list price ratios of 100% and 97.7%, respectively.
The local inventory supply now sits at 7.3 months compared to 1.3 months in October 2021.
“It leans toward a buyer’s market, but it certainly doesn’t suggest distress,” Blasses said. “In October of 2023, we had 5.9 months of inventory. In February of 2023, we had 3.85 months. So a balanced market is four to six months of inventory, and we’re currently slightly higher than that. I don’t see any crisis happening. It’s just a balance.”
Bera said the current environment is allowing for much fairer negotiations between buyers and sellers.
“I was feeling bad for the buyers (in past years),” she said. “Now, I’m happy to see some affordability, it being a buyer’s market now. The sellers are being understandable with the negotiation process and the entire process. What’s happening now is a fair deal between both parties, and both parties are in good shape for the stabilization forecast.”
Comparisons to 2008 crash
Bera touched on the notion of comparing modern Cape Coral market trends to the lead-up to the 2008 housing market crash and ensuing financial crisis. Cape Coral, in retrospect, was viewed as a red flag for larger problems.
“What happened in 2008 was, in my opinion, mortgage fraud in the industry,” she said. “There was pretty much no regulation whatsoever. After 2008, there were so many acts and regulations in the market. For us, Cape Coral was not an exception for what happened everywhere else in 2008.
“After that, from 2009 to 2019, the growth here was incredible, something like 8% or 9% annual growth. Then the pandemic hit, and we had the tight demand and the bidding wars. It drove prices to these unreal levels.”
Blasses echoed these sentiments.
“There’s lots of guidelines in place now,” she said. “Back then, a lot of the problems that happened in 2008 were due to risky lending and speculative buying. We don’t have those things now, so I don’t see us having a 2008 market at all.”
Affordability, natural disaster concerns
Rising insurance premiums and hurricane risks are legitimate challenges in coastal Florida, and Cape Coral is no exception.
Additionally, the lingering impact of Hurricane Ian in 2022 continues to shape perceptions of the market.
“After Hurricane Ian, FEMA updated the flood zone,” Bera said. “There used to be areas not considered part of the flood zone, but now they are. Sometimes, I hear some complaints (from potential buyers) but not as much after the flood areas were updated.
“The new-home construction is helping with the insurance, and there are more and more programs out there to help homeowners get their homes more hurricane-proof.”
Blasses said that living on the ocean shore carries an inherent danger that buyers are fully aware of — and choose to live with — before relocating.
“Of course, there’s always the risk (with natural disasters), but that can go for many areas in the country,” she said. “We do live in paradise, and we only have so much waterfront and Gulf access in Cape Coral.
“It does put people at risk a bit, but you know what? That’s the price you pay to live in a beautiful city on the water.”