Florida Metros Dominate List Of Fastest-Cooling U.S. Housing Markets

As the U.S. housing market cools heading into late fall, Florida metros are experiencing some of the steepest home price declines in the nation. According to a recent report by Realtor.com, seven of the ten coolest markets among the 100 largest U.S. metros are located in Florida.

Cape Coral, a city of 32,000 known for its scenic canals, recorded Florida’s largest year-over-year home price drop in September at 7.1 percent—the second-highest decline nationally behind Champaign, Illinois. The report, based on data from real estate analytics firm Cotality, identified the following Florida markets among the top ten coolest:

• Naples: 6.7 percent decline
• Punta Gorda: 6.2 percent decline
• Sebring: 5.2 percent decline
• North Port: 5.1 percent decline
• Brownsville: 4.8 percent decline
• Sebastian: 4.6 percent decline

Wichita Falls, Texas, and Kahului, Hawaii, ranked eighth and ninth, respectively.

Market Dynamics And Price Trends

In August, the typical single-family home in Cape Coral sold for $350,000, down nearly 7 percent from the previous year, according to Realtor.com researchers. Compared with August 2022 during the pandemic-era housing boom when mortgage interest rates were near historic lows, the median home sales price in Cape Coral has dropped by more than 13 percent.

North Port has experienced even steeper declines, with the typical home selling in August 2025 for 20 percent less than three years prior.

Cara Ameer, a real estate broker at Coldwell Banker Vanguard Realty in Florida, explained that many of these markets are retirement and second-home destinations. With limited business or industry development outside of tourism, wages remain lower and job-driven relocation is minimal, resulting in reduced demand for both purchasing and renting.

Insurance And Foreclosure Pressures

Cape Coral’s location on the Gulf Coast makes it vulnerable to hurricane damage and flooding, creating significant challenges for homeowners seeking insurance coverage. The city has the nation’s third-highest premium-to-market ratio at 2.2 percent, meaning homeowners pay 2.2 percent of their home’s market value in annual insurance premiums.

For a $350,000 home in Cape Coral, annual insurance premiums would total approximately $7,700. According to the report, while Florida does not have a state income tax, the savings are often insufficient for lower-income residents to offset rising costs associated with coastal property ownership, including insurance, HOA fees, and condo assessments.

Cape Coral also earned the third-highest foreclosure rate among 225 metros with populations of at least 200,000, according to the Q3 2025 report from ATTOM, a curator of land, property, and real estate data.

Karen Borrelli, president of Royal Palm Coast Realtor Association and agent at John R. Wood Christie’s International Real Estate, noted that while foreclosures and short sales in Cape Coral have increased compared with last year, the data does not suggest an imminent market disaster.

Implications For Property Owners And Investors

The cooling trends in Florida’s coastal markets reflect a combination of national factors—including elevated mortgage rates and inflation—and local challenges specific to hurricane-prone regions. Property owners in these markets face ongoing pressure from rising insurance costs, increased HOA fees, and potential property value declines.

For real estate investors and property owners, the current market conditions require careful financial planning, property valuation analysis, and risk assessment. Understanding local market dynamics, insurance cost trends, and foreclosure rates is essential for making informed decisions about property acquisitions, dispositions, and portfolio management.

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