Cape Coral Housing Market Offers More Than Meets the Eye

Written by:

Steve Marcinuk

Date:

22 Oct 2025

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

The Cape Coral real estate market has attracted significant media attention recently, with many national publications labeling it as one of America’s most challenging housing markets. However, agents working locally present a more nuanced view of what’s actually happening.

Carleen Murone, a realtor with eXp Realty who has been active in the Southwest Florida market since 2022, offers a perspective that differs from the widely reported struggles. Her experience with entrepreneurs, investors, and luxury clients reveals a market that is more complex than headlines suggest.

Setting the Record Straight on Market Conditions

The popular narrative of widespread distress in Cape Coral does not reflect the reality for most homeowners. “The people underwater are the people who bought during COVID—they bought in the frenzy, bought sight unseen, and just came because they were afraid they were never going to be out of lockdown,” Murone says. “Most people have a lot of equity in their homes here still. Anything that was purchased prior to 2022, which is most of the homes, people have a lot of equity.”

The recent market correction represents a return to more sustainable levels, not a collapse. Cape Coral was significantly undervalued before the pandemic, with prices well below comparable markets. The sharp rise in home values during the COVID era brought prices closer to where they should be relative to other regions.

Recent data supports this more balanced view. According to Murone’s tracking of Altos Research metrics, the market indicator recently moved into territory slightly favoring sellers, rising from the high twenties to just over 31. “We’re at 6.6 months of inventory, which is pretty much a balanced market,” she notes, referencing the typical benchmark of four to six months for market equilibrium.

Insurance and Tax Concerns Subside

Two major concerns that have dominated coverage of Florida’s real estate market—insurance costs and property taxes—appear to be stabilizing in Cape Coral. Contrary to reports of sharply rising insurance premiums, Murone has observed decreases in many cases and has not seen deals fall through because of insurance costs.

“We have more carriers here than we had a year or two years ago. We were the third highest state when I looked, and we had the lowest percentage increase in 2024 than any of the other states,” she says. Her personal experience reflects this trend: “My homeowners only went up $6 over last year.”

Property tax concerns have also eased as market corrections have brought appraisals in line with current conditions. Property appraisals are much lower than last year so even with milage adjustments the outlook on the TRIM notices mailed out is promising, with taxes coming down from the prior year for many.  The budgets have not been finalized yet so that could change.

Buyer Behavior and Market Dynamics

The current buyer pool reflects Cape Coral’s unique dynamics, with many purchases being discretionary rather than necessity-driven. “We’re a market where people don’t have to buy. A lot of times they want to buy because it’s a secondary home or a pre-retirement home,” Murone observes. “People don’t have to sell. A lot of people have come in and paid cash.”

This has both challenges and opportunities. Many buyers are waiting for interest rates to fall further before making a move. However, Murone cautions that this strategy could backfire: “As the rates start dropping and the inventory is starting to get lower, the prices are going to come up. So they’re going to sacrifice in price for that lower rate.”

Creative financing solutions are becoming more common as buyers and sellers look for ways to navigate current conditions. Murone recently structured a listing with a rate buydown program, pre-calculating scenarios for FHA buyers with down payment assistance. “Someone can qualify for FHA with three and a half percent down, and she comes up with the additional 3% that can be combined to hit the maximum for down payment assistance. They could have a mortgage rate of $1,500.”

Infrastructure Investment Supports Long-Term Growth

Cape Coral’s relative youth, the city is only 55 years old, means ongoing infrastructure development. Some view this as a burden, but others see it as an investment in the city’s future. The current expansion of city water and sewer services, while creating short-term assessment costs for homeowners, represents infrastructure investment that supports long-term growth.

“You can’t compare us to a city that’s hundreds of years old. We’re still building out all our infrastructure here,” Murone says. This ongoing development, combined with the area’s natural advantages, continues to attract builders and developers.

Strong Demand for Development

The appetite for new construction remains strong across multiple price points. Land sales are a telling indicator of market confidence. When Murone listed a lot next to her house, she received ten offers within 24 hours. Even after the initial buyer backed out due to well and septic requirements, the lot was under contract again within three hours.

“Land acquisition buyers are asking, ‘Do you have any more? Do you have any more?’” she reports. New construction is happening at various budget levels, from high-end custom homes to more affordable options in the $300,000 to $400,000 range, still below the national median.

Market Segments Showing Resilience

Certain market segments are performing particularly well. Homes under $400,000 are moving quickly, and luxury properties continue to sell when priced appropriately. The key is understanding the story behind the pricing, particularly for homes with premium finishes or unique features.

The vacation rental market, despite some owners discovering that short-term rentals require more management than anticipated, continues to offer options for property owners who bought during the peak and prefer to wait rather than sell at a loss.

A Market in Transition

The Cape Coral market appears to be stabilizing, not collapsing. While some sellers who purchased during the COVID buying frenzy face tough decisions, the broader market shows signs of recovery and balance. Open house activity has increased, inventory levels are normalizing, and buyers and sellers are finding creative ways to complete transactions.

For real estate professionals and investors, Cape Coral represents a market in transition rather than one in crisis. The combination of infrastructure investment, diverse price points, strong builder activity, and the area’s appeal as a subtropical destination suggest a market working through temporary adjustments rather than facing long-term decline.

Navigating Current Conditions

The key for both buyers and sellers is working with professionals who understand the nuances of local market conditions and can structure creative solutions that make financial sense for all parties.

Murone’s experience highlights the importance of adaptability. She frequently works with buyers seeking secondary homes, investors looking for rental opportunities, and traditional buyers searching for value. Each group faces different challenges, but all benefit from a clear understanding of the market’s realities.

Looking Ahead

Cape Coral’s real estate market is evolving. The correction from the pandemic-era surge has led to a healthier, more balanced environment. While challenges remain for some homeowners who bought at the peak, most residents still hold significant equity.

Insurance and property tax concerns, while not insignificant, have become more manageable as new carriers enter the market and property appraisals are reflective of current values. Infrastructure upgrades, though sometimes costly in the short term, are laying the groundwork for future growth.

The continued demand for land and new construction signals confidence among both buyers and builders. Homes at accessible price points are selling quickly, and the luxury segment remains active for well-priced properties. The vacation rental market adds flexibility for owners navigating changing circumstances.

Ultimately, Cape Coral’s housing market is characterized by resilience and adaptability. As buyers and sellers adjust to new realities, the market is finding its equilibrium. For those considering a move or investment, success will depend on understanding the local landscape and working with experienced professionals who can guide them through a market that is far more balanced and opportunity-rich than headlines suggest.