4 Florida Housing Markets Currently Worse Than Cape Coral

The Florida sun might be shining, but beneath that warm glow, the housing market tells a complex story. If you've been watching the news, you might have heard whispers of a slowdown, a “balancing act,” or even some price drops. As someone deeply invested in understanding these market shifts, I've spent a lot of time poring over the latest data, looking for the real pulse of Florida's communities.

And when we talk about the housing markets in Florida, which are currently much worse than Cape Coral, let me tell you, it's not as simple as it seems, but yes, for single-family homes in May 2025, some specific metropolitan areas are indeed showing more significant signs of market cooling or price depreciation than Cape Coral.

What do I mean by “worse”? I'm looking at where median home prices are falling faster, or closed sales are declining more sharply, signaling a softer market for sellers and perhaps more opportunities for buyers. It's about spotting the areas where the market correction is hitting harder.

Florida Housing Markets Currently Worse Than Cape Coral

The Big Picture: Florida's Real Estate in Flow

Florida's real estate market is always buzzing, a hot spot for relocation, investment, and retirement. But even the Sunshine State isn't immune to national trends like higher interest rates and a general cooldown after years of dizzying growth. Tim Weisheyer, the 2025 Florida Realtors President, hit it right on the head when he said, “Florida's housing market is finding its balance, and that's good for buyers and sellers alike.” This isn't a crash, but a shift.

From what I've observed, and the data backs this up, we're seeing more homes for sale, which is great news for buyers who felt like they were in a fierce bidding war just a year or two ago. This increase in inventory, coupled with buyers adjusting to higher borrowing costs, means sellers need to be more strategic with their pricing.

Looking at the statewide figures for single-family homes in May 2025:

• Closed Sales: Down 5.7% from last year, totaling 24,756.
• Median Sale Price: $415,000, a 2.7% drop from a year ago.

Dr. Brad O'Connor, the Chief Economist for Florida Realtors, pointed out that this is the third month in a row of year-over-year price drops statewide for single-family homes. However, he's quick to remind us that prices are still a hefty 54% above where they were in 2020. This context is vital – it's a recalibration, not a collapse. It's a return to something more “normal” after a period that was anything but.

Understanding Cape Coral's Market – A Benchmark

Let's zoom in on Cape Coral-Fort Myers MSA, which serves as our benchmark for this discussion. This area, particularly Lee County, saw immense growth and certainly its share of challenges, especially after Hurricane Ian. When I look at the numbers for single-family homes in Cape Coral-Fort Myers MSA for May 2025, here's what stands out:

• Closed Sales: 1,443, a slight 1.6% decrease from the previous year. This is a pretty moderate dip, suggesting demand is still present.
• Median Sale Price: $375,000, a more notable 9.6% decline year-over-year.

From my perspective, this price correction in Cape Coral makes sense. It experienced a massive surge in prices post-pandemic and then dealt with the complexities of hurricane recovery. While recovery brings investment, it also brings unique challenges that can temporarily cool the market. A nearly 10% price drop sounds significant, but remember, this area's median price was likely inflated in recent years, making this more of a return to reality than a deep plunge. Buyers now have a bit more room to negotiate, and sellers are adapting.

So, the question remains: are there other areas in Florida where the single-family home market is feeling an even greater squeeze than Cape Coral's notable 9.6% price correction? The answer is yes, and let's explore which ones and why.

The 4 Housing Markets in Florida Currently Worse Than Cape Coral

When I analyzed the statewide data for May 2025, focusing on single-family homes, I looked for metropolitan areas that showed more aggressive year-over-year declines in median sale prices or a combination of significant price and sales drops compared to Cape Coral-Fort Myers MSA's -9.6% price change and -1.6% sales change.

Here's what I found, with four specific MSAs standing out:

1. Naples-Immokalee-Marco Island MSA

• May 2025 Single-Family Home Data:
  • Closed Sales: Down 15.3% year-over-year.
  • Median Sale Price: $767,800, a sharp 19.2% decrease year-over-year.

In my view, Naples stands out as a prime example of a market currently experiencing a greater downturn than Cape Coral. Why is this median price drop so much more severe here? Naples is known for its luxury and high-end properties. These segments of the market can be more sensitive to economic shifts, particularly rising interest rates and stock market volatility, which impact wealthier buyers. When the cost of borrowing goes up, or investments dip, ultra-luxury buyers might pause, leading to fewer sales and more pressure on sellers to lower prices. The sheer value of these homes means even a percentage drop translates to a large dollar amount, which can feel more impactful.

2. Punta Gorda MSA

• May 2025 Single-Family Home Data:
  • Closed Sales: Up 1.7% year-over-year.
  • Median Sale Price: $325,000, a significant 14.5% decrease year-over-year.

Punta Gorda's numbers present an interesting puzzle. While closed sales actually increased – suggesting continued buyer interest – the median sale price dropped by a substantial 14.5%. This is a larger price erosion than Cape Coral's. My take on this is twofold: First, like Cape Coral, Punta Gorda was heavily impacted by Hurricane Ian, and the post-hurricane market dynamics, including insurance costs and recovery efforts, are likely influencing buyer behavior and valuations. Second, it's possible that a higher proportion of sales at lower price points or properties needing more work are driving down the median, or sellers who held on to highly appreciated properties are now more motivated to adjust to current market conditions. It's a signal that while homes are selling, the perceived value of those homes has softened considerably.

3. Sebastian-Vero Beach MSA

• May 2025 Single-Family Home Data:
  • Closed Sales: Down 6.8% year-over-year.
  • Median Sale Price: $386,190, a 10.2% decrease year-over-year.

Sebastian-Vero Beach, a coastal region, also shows a steeper decline in median price than Cape Coral, alongside a larger drop in sales. This combination suggests a more pervasive cooling. Areas along the coast often attract second-home buyers and retirees, who might be more discretionary in their purchases. Higher insurance premiums, a concern across all of Florida, could be particularly impactful in coastal areas like this, adding to the overall cost of homeownership and potentially dampening buyer enthusiasm, leading to price concessions. The 10.2% price drop indicates sellers are adapting to a clearer buyer's market here.

4. North Port-Sarasota-Bradenton MSA

• May 2025 Single-Family Home Data:
  • Closed Sales: Down 4.7% year-over-year.
  • Median Sale Price: $475,000, a 9.9% decrease year-over-year.

While the price drop here is only slightly worse than Cape Coral's (-9.9% vs. -9.6%), the sales decline is significantly greater (-4.7% vs. -1.6%). The North Port-Sarasota-Bradenton area has been a magnet for new residents, especially during the pandemic boom. Such rapid growth often leads to prices that outpace fundamental value, creating conditions ripe for a correction when demand cools. This area saw massive appreciation, and now, with higher interest rates and increased inventory, the market is finding its new equilibrium. The combined effect of dropping sales and prices signifies a more challenging environment for sellers compared to Cape Coral.

Here’s a quick comparison highlighting the May 2025 single-family home performance:

MSA	Median Sale Price (May 2025)	Y/Y % Chg Price	Closed Sales (May 2025)	Y/Y % Chg Sales
Cape Coral-Fort Myers MSA (Benchmark)	$375,000	-9.6%	1,443	-1.6%
Naples-Immokalee-Marco Island MSA	$767,800	-19.2%	431	-15.3%
Punta Gorda MSA	$325,000	-14.5%	536	+1.7%
Sebastian-Vero Beach MSA	$386,190	-10.2%	273	-6.8%
North Port-Sarasota-Bradenton MSA	$475,000	-9.9%	1,574	-4.7%

Data from Florida Realtors®, May 2025 Single-Family Home Market Activity.

Market Nuances: Why Some Areas Experience Sharper Shifts

Beyond the specific numbers, I think it's crucial to understand the underlying currents affecting these markets. Why are some areas seeing sharper adjustments than others?

• Luxury Market Sensitivity: Areas with a higher concentration of luxury homes (like Naples) are often the first to feel the effects of economic shifts. When interest rates rise, even wealthy buyers feel it or choose to invest their capital elsewhere temporarily.
• Post-Hurricane Recovery Paths: While all of Florida contends with hurricane season, areas hit directly by formidable storms can see diverse recovery patterns. Insurance costs rise, availability of skilled labor for repairs can be tight, and buyer perceptions can shift. The markets recovering from Hurricane Ian are still finding their footing. From my experience, some areas bounce back quicker due to strong local economies or higher investment, while others might lag.
• Prior Price Appreciation: Markets that saw the most aggressive price increases during the peak of the boom are often facing a more significant correction. It's simply mathematics; the higher the run-up, the more room there is for prices to come down without necessarily reflecting a “crash” but rather a return to a more sustainable level.
• Inventory Ratios: Dr. O'Connor mentioned that Florida's inventory levels for both single-family homes (5.6 months' supply) and condo-townhouses (10.3 months' supply) are back to pre-2020 levels. A higher supply, especially when combined with lower demand, puts downward pressure on prices. If an area has a particularly high number of homes for sale relative to buyer interest, that market will soften more quickly.

It's also worth noting that the condo and townhouse market statewide is experiencing even more pronounced price erosion, with average median prices for these units being down 6.1% year-over-year. This has been a longer trend, starting in July of last year. While my focus here is single-family homes, it's a good reminder that different property types react differently to market pressures.

“Worse” Doesn't Always Mean “Bad”

For current homeowners, seeing price declines can be concerning. But as a professional in this field, I always emphasize perspective. A market correction isn't a disaster, especially in Florida, which remains a highly desirable place to live. Today's market is nothing like the Great Financial Crisis; inventory levels are still well below 2008 figures.

For potential buyers, especially those who were priced out during the frenzied years, these shifts represent opportunity. More inventory means more choices, less competition, and hopefully, more reasonable prices. This “balancing act” is exactly what a healthy market needs to prevent unsustainable bubbles.

My advice to anyone navigating these markets is simple: local expertise matters more now than ever. A good Realtor isn't just about unlocking doors; they're about explaining the hyper-local nuances of your specific neighborhood, the current insurance climate, and effective pricing strategies. In these evolving times, preparation and expert guidance truly make all the difference.

The Road Ahead

Florida's housing market is resilient. It's adjusting, not collapsing. While some areas, like those we've discussed – Naples, Punta Gorda, Sebastian-Vero Beach, and North Port-Sarasota-Bradenton – are experiencing greater price and sales adjustments than Cape Coral, these are generally healthy corrections after a period of intense growth. They reflect a market maturing and finding a new, more sustainable pace. Whether you're buying or selling, understanding these localized trends is key to making informed decisions in Florida's dynamic real estate world.