If you're thinking about buying or selling a home in Cape Coral, Florida, you need to be aware that the Cape Coral housing market is currently facing a high risk of price decline. Recent data from Cotality (formerly CoreLogic) shows that Cape Coral has experienced the largest year-over-year decline in home prices among the top 100 markets, with prices falling by a significant -6.5%. This isn't just a small blip; it signals a real shift, and prices are now back to levels we saw in the spring of 2022. While some parts of the country are still seeing home prices go up, Florida, and specifically Cape Coral, is in a cooling-off period.

Cape Coral Housing Market in Florida Faces High Risk of Price Decline

What's Driving This Downturn in Cape Coral?

It's easy to look at the numbers and feel a bit uneasy, but understanding why this is happening can give us a clearer picture. For a long time, Florida, and many of its popular cities like Cape Coral, saw incredible home price growth. People flocked there for the sunshine, beaches, and a generally more affordable lifestyle compared to other parts of the country. But as Dr. Selma Hepp, Chief Economist at Cotality, points out, “housing market headwinds continue to challenge homebuying demand.”

Think of it like this: imagine a popular toy that everyone wants. The price goes up because so many people are trying to buy it. But eventually, either fewer people want it, or more of that toy becomes available. In Cape Coral's case, after years of really strong growth, the market is starting to catch its breath.

One of the biggest factors affecting home prices nationwide, and certainly in places like Florida, is affordability. According to Cotality's data, the national median home price is around $395,000, and to afford that, you'd need an income of about $87,800. While these are national figures, they help paint a broader economic picture. When people worry about their finances, job prospects, or even potential tariff impacts, they tend to be more cautious about making big purchases like a home. This caution can lead to less demand, and when demand softens, prices can start to fall.

Florida's Broader Market Trends

Cape Coral isn't alone in seeing its housing market cool down. Florida as a whole reported negative home price growth of -0.8% in April 2025. This means that, on average, homes across the state are not increasing in value, and in many cases, they are losing value.

Dr. Hepp specifically noted that “several markets in the state are seeing price declines.” In fact, Cotality's data identified that all five of the U.S. markets with the highest risk of price decline are located in Florida. This reinforces the idea that the Sunshine State is undergoing a significant market adjustment.

It's interesting to see that Florida's median sales price has dipped below the national median, which is a notable shift. This suggests that the rapid price increases the state experienced previously might have pushed prices beyond what many buyers can comfortably afford, especially when you factor in current economic uncertainties.

Cape Coral's Specific Situation: A Deeper Dive

Let's bring it back to Cape Coral. The data is quite stark: a -6.5% year-over-year decline is a substantial drop. For context, the national year-over-year price growth was only 2.0% in April 2025, with single-family detached homes growing at 2.46%. However, single-family attached homes actually saw a decline of 0.08% nationally – the first annual drop since 2012.

Here's what this means for Cape Coral:

• Prices are back where they were: The -6.5% decline means that the average home price in Cape Coral is now similar to what it was in the spring of 2022. If you bought a home in late 2022 or early 2023 at the peak of the market, you might be looking at a loss in equity right now.
• More “Cool” Markets: Cape Coral is listed as the “coolest” housing market in the country in Cotality's April 2025 data, with Punta Gorda, Florida close behind at -6.2%. This “coolness” is a direct indicator of declining prices.

Why is Cape Coral Hit So Hard?

It's worth digging into why Cape Coral might be experiencing a more pronounced downturn than some other areas.

1. Rapid Appreciation: Cape Coral, like much of Florida, saw very rapid price increases in the years leading up to this current slowdown. Markets that experience such quick growth are often more susceptible to price corrections when conditions change. It’s like a rubber band being stretched too far – it can snap back.
2. Affordability Concerns: While Florida might have been more affordable than places like California or New York in the past, the surge in prices has made it less so. As incomes haven't kept pace with the soaring home values, more buyers are priced out or become hesitant.
3. Economic Headwinds: The broader economic concerns mentioned earlier, such as worries about job security and inflation, can hit markets like Cape Coral harder if they are more reliant on certain industries or if they attract a significant number of buyers who are sensitive to economic shifts.
4. Supply vs. Demand: While the data mentions that “improved for-sale supply is providing buyers with more options,” if demand in a specific market like Cape Coral softens significantly, even a normal supply can feel like too much, leading to price pressure.

What Does This Mean for Buyers and Sellers?

For Sellers:

If you're looking to sell your home in Cape Coral, it's crucial to have realistic expectations.

• Price Appropriately: Overpricing your home in this market could mean it sits on the market for a long time, potentially leading to price reductions later. Working with a local real estate agent who understands current market conditions is key. They can help you price your home competitively based on recent sales.
• Be Prepared for Negotiations: Buyers might have more leverage than they did a year or two ago. Be prepared for offers that may be below your asking price and be open to negotiations.
• Highlight Your Home's Strengths: Focus on what makes your home unique and appealing. Is it beautifully renovated? Does it have a great canal view? Emphasize these features to attract buyers.

For Buyers:

This market shift might present some opportunities for buyers.

• More Negotiating Power: With prices softening and more homes on the market, you may find it easier to negotiate on price and terms.
• Wider Selection: You might have a better chance of finding the home that truly fits your needs and budget, rather than feeling rushed into a purchase.
• Don't Wait Too Long: While prices are declining, there's also a forecast for potential future growth. Waiting indefinitely might mean missing out on current favorable conditions. It’s important to buy when it makes sense for your personal financial situation and long-term goals.

Other Florida Housing Markets to Watch: The “High-Risk” List

Cotality's data highlights a “Markets to Watch” list featuring areas with a “very high risk of price decline.” The fact that Cape Coral tops this list at number 1 is a significant warning sign. Other Florida markets on this list include:

• Lakeland, FL (2nd)
• North Port, FL (3rd)
• St. Petersburg, FL (4th)
• West Palm Beach, FL (5th)

The accompanying chart showing “High-risk market home price trends” visually illustrates this. For Cape Coral, the purple line representing its home price trend shows a clear peak and subsequent decline, now leveling off but still significantly lower than its high point.

Looking Ahead: What's the Forecast?

The national picture is one of slowing growth, but not necessarily a nationwide crash. Dr. Hepp notes that “annual home price growth has slowed considerably, but home prices this spring have held up, and gains have mostly mirrored trends seen pre-pandemic.” This is somewhat encouraging, suggesting that the current slowdown might be more of a correction after an overheated period rather than a full-blown recession in housing prices across the board.

However, for markets like Cape Coral that experienced very high growth and are now seeing significant declines, the path forward could be different. The factors influencing the national market – economic uncertainty, interest rates, and affordability – will continue to play a role.

The fact that Florida, and specifically Cape Coral, is overrepresented in the markets most at risk suggests that local economic conditions, coupled with the broader national trends, are creating a more challenging environment for home values in this region.

It's my professional opinion, based on this data and my understanding of real estate cycles, that sellers in Cape Coral should prepare for a market where they might not achieve the prices seen at the peak. Buyers, on the other hand, could find more favorable conditions, but should still be diligent in their research and financing.

As Dr. Hepp mentions, “With more visibility around tariffs, diminishing concerns about an economic recession, and more homes for sale, the homebuying market could see some improved optimism and more activity going forward.” This suggests that while there are risks, there are also potential catalysts for improvement. However, for Cape Coral, the immediate outlook remains cautious, with a continued high risk of price decline.

It’s crucial for anyone involved in the Cape Coral real estate market to stay informed and make decisions based on the most current data and local expert advice.