Southern housing markets that overheated during the pandemic are now facing a sharp reversal, with several cities projected to see outright price declines rather than a gentle cooldown. I focus here on seven specific markets where forecasts and recent sales data point to the real possibility of a crash in the next 12 months, rather than a mild correction. For buyers, investors and owners, understanding why these cities are vulnerable is essential to gauging risk and timing any move.
1) Cape Coral, Florida
Cape Coral has become the poster child for a looming Southern housing reset. Forecasts cited in recent research show the Cape Coral–Fort Myers metro facing a potential 10.2% drop in home values, one of the steepest projected declines in the country. Separate reporting on Cape Coral underscores how quickly demand cooled after a pandemic boom, with high mortgage rates choking off out-of-state buyers who once bid aggressively over asking.
Another analysis of Southern Cities Where Home Prices Are Expected To Crash in the Next Months notes that in Cape Coral, Year-over-year change has already hit 10.2%, signaling that the downturn is already underway rather than hypothetical. For local owners, that combination of realized and projected declines raises the risk of slipping into negative equity, while investors who counted on Earning passive income may find You need to reset rent and appreciation assumptions quickly.
2) Fort Myers, Florida
Just across the river, Fort Myers shares many of the same vulnerabilities, which is why the broader Fort Myers area appears alongside Cape Coral in multiple risk rankings. Projections for the Cape Coral–Fort Myers, Florida metro point to a potential 10.2% slide in prices, reflecting how quickly speculative demand can unwind when borrowing costs spike. Investors who bought pre-construction condos or short-term rentals at peak valuations are particularly exposed if they need to sell into a falling market.
Broader state-level analysis flags Florida as one of the four states where Home prices are expected to crash, with Cape Coral singled out for some of the sharpest drops. Because Fort Myers is economically and geographically intertwined with that city, a wave of price cuts in one submarket can quickly spill over into the other. For homeowners relying on equity for retirement or refinancing, that interconnectedness means local conditions, not just national trends, will drive their financial outlook.
3) North Port, Florida
North Port, part of the North Port–Sarasota–Bradenton corridor, is another Florida market where the word “crash” is no exaggeration. One detailed forecast cited in Southern Cities Where Home Prices Are Expected To Crash in the Next Months notes that Prices in North Port are expected to fall by almost 9 percent over the next year as buyer demand wanes. A companion analysis pegs the Median sale price at $293,000, a level that now looks vulnerable after years of rapid appreciation…