Across much of the United States, housing wealth still looks robust on paper, yet in a cluster of coastal markets values are slipping fast enough to erase years of equity in a matter of months. Forecasts now point to price drops approaching 10% in some Florida metros by 2026, while several West Coast cities that once epitomized boom-time exuberance are suddenly discount markets. The pattern is not a dramatic foreclosure wave but a quieter reset driven by climate risk, high borrowing costs and a fundamental rethink of what coastal living is worth.
What is emerging in these nine cities is a kind of slow-motion margin call on the coastal premium, where buyers are no longer willing to pay yesterday’s prices for tomorrow’s risks. The national market may be edging back toward balance, but for homeowners in these places, the shift feels less like normalization and more like a stealth devaluation of their biggest asset.
The new fault line: coastal risk in an otherwise stable market
Nationally, home values have flattened rather than collapsed, with broad measures showing prices little changed after the pandemic surge. Analysts describe a market that has cooled from its frenzy but remains supported by tight inventory and still-elevated household wealth, a backdrop that helps explain why the pain is so localized. One major forecast of 22 U.S. metros where prices are expected to decline in 2026 projects an average drop of about 4% across those locations, a modest correction rather than a systemic crash that would echo 2008.
Yet within that seemingly manageable average, coastal outliers are flashing red. A detailed forecast of where prices could decline in 2026 highlights 10.2% projected declines in Cape Coral–Fort Myers, Florida and 8.9% in North Port–Sarasota–Bradenton, Florida, far steeper than the national outlook. That gap is the story: a market that looks calm in aggregate is masking a sharp repricing of coastal risk.
Florida’s Gulf Coast: from pandemic darlings to projected laggards
Florida’s Gulf Coast was one of the biggest winners of the pandemic migration wave, as buyers chased sunshine, space and relatively low taxes. Now it is ground zero for the sharpest forecast declines, with one evaluation of 22 U.S. metros pointing to the steepest drops in Florida, led by Cape Coral–Fort Myers. In North Port–Sarasota–Bradenton, prices are already slipping, and multiple forecasts now converge around declines close to 9% over the next year as demand cools and buyers balk at higher insurance and borrowing costs…