Home prices are plummeting in the Florida city considered to have been “ground zero” for the subprime mortgage crisis of 2008, Cape Coral. According to housing experts, the city now has one of the worst housing markets in the entire country—and the situation is likely to continue precipitating in the coming months.
What Is Happening in Cape Coral?
Cape Coral’s housing market exploded during the pandemic, when thousands of out-of-state newcomers flocked to the relatively affordable Florida paradise, snatching up for-sale homes and driving up prices. Between May 2020 and May 2022, the median sale price of a home in the city went from $239,020 to $436,475, according to Redfin.
But since 2023, when the nationwide market experienced a brief price correction, Cape Coral’s housing market has been on a downturn. In May 2023, the median sale price of a home had plunged by 5.3 percent from a year earlier to $413,245; in May 2024, it was down to $391,200, down by another 5.3 percent year-over-year. And in May 2025, the median sale price of a home in Cape Coral was down to $361,250, 7.7 percent less than a year earlier.
According to a recent analysis for the Wall Street Journal conducted by the site Homes.com, home prices in the Cape Coral metropolitan statistical area fell by 11 percent in the two years through May—the most of any major metro area in the country in that same period.
Why Is the City Experiencing a Downturn?
Like in the rest of the Sunshine State, there is currently an imbalance between buyers and sellers in Cape Coral. According to Parcl Labs, the city market currently shows a record 10,049-unit surplus—for a 525 percent growth since 2022—and absorption rate at 0.268—lower than the U.S. average of 0.423…