Southwest Florida’s Real Estate Market Faces a Period of Transition

Written by:

Steve Marcinuk

Date:

07 Nov 2025

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The Fort Myers real estate market is entering a period of recalibration following several years of dramatic change, says Olivia Kaplan, a second-generation property manager and real estate broker associate at Kaplan Pro Realty, LLC who brings over a decade of experience in Southwest Florida.

After the pandemic-fueled surge that saw homes attracting multiple offers within days, often without in-person viewings, the region is now settling into what Kaplan describes as a return to pre-pandemic normalcy, not a market crash.

“People are saying we’re in a crash. I’m like, we’re not in a crash. We’re just leveling back down to what we were before,” says Kaplan, whose family business includes Rentifi Property Management, LLC and HOA management through MyTown Communities, LLC. “We’re adjusting back down to our normal from before the huge COVID boom.”

A Period of Unprecedented Growth and Sudden Disruption

The Fort Myers market saw extraordinary growth from 2020 to 2022, fueled by low interest rates, the rise of remote work, and Florida’s relatively relaxed lockdown policies. Kaplan recalls this period as a “massive frenzy” dominated by cash buyers, with properties selling within hours of being listed.

This trajectory was abruptly interrupted by Hurricane Ian in 2022, which caused widespread devastation along the coast and marked the first major storm experience for many newcomers.

“A lot of these individuals that moved down from the north never experienced a hurricane, didn’t know what to expect, and got the worst-case scenario,” Kaplan notes. “I’ve lived in Florida my whole life, and I’ve never seen a storm that devastating hit this area. A lot of people were like, ‘We got to get out of here. We don’t like this hurricane thing.’”

The impact of the hurricane, combined with return-to-office requirements, prompted many recent arrivals to move back to their original states. This has contributed to increased inventory and softer pricing in the local housing market.

Current Market Conditions: Adjusting Expectations

Today’s market presents challenges for both buyers and sellers. Sellers who purchased at peak prices are now facing the reality of lower valuations.

“I just have to explain to them, this is the market. If you want it to sell, we have to price it competitively, and we have to highlight key features,” Kaplan says. Flood zone status and assumable flood insurance are now critical selling points, especially after FEMA’s updated flood maps and resulting premium increases.

Sellers are also competing with new construction that offers hurricane-impact windows, elevated structures above flood plains, and builder incentives that individual sellers typically cannot match.

For buyers, the increased inventory and negotiating power tilt the market in their favor, although some still hope for the ultra-low interest rates seen during the pandemic.

“There are those few that are still hoping for that 2.5% interest rate. We probably won’t see that in our lifetime,” Kaplan observes. “But the other ones, first-time home buyers, want to buy. They want to live somewhere, and they see that right now it is more of a buyer’s market.”

Investor Preferences and Shifting Strategies

Investor interest is currently focused on single-family homes outside of HOA communities and small multifamily properties such as duplexes and quadplexes. Condominiums have lost appeal due to rising insurance costs and new legislation requiring engineering reports and increased reserves.

“Any of my investors that have condos, a lot of them are trying to liquidate those condos,” Kaplan explains. Legislation following the Surfside collapse has resulted in HOA fees doubling or tripling for many communities, particularly impacting retirees on fixed incomes.

Affordability Challenges Intensify

Fort Myers is no longer seen as an affordable coastal market. “Fort Myers is not affordable anymore,” Kaplan states. “Port Charlotte is now becoming the affordable coastal town.”

This change is forcing many local residents to make difficult decisions, such as moving inland to areas like Ocala or leaving Florida altogether for states like Kentucky and Tennessee.

International Investment Patterns

Foreign investment remains a feature of the market, particularly from Eastern Europe and Germany, while Canadian investment has declined. Cape Coral continues to attract German investors, a trend rooted in historical marketing efforts and the presence of a large German-American community.

“Germans love Cape Coral,” Kaplan notes. “When they built Cape Coral, they heavily marketed to Germany. There’s also a very large German American club in Cape Coral, so it’s like a home away from home.”

Operational Pressures in Property Management

Property management faces ongoing cost pressures, with maintenance expenses as the largest challenge. “Fixing a toilet a year or two ago was $100, and now it’s $300-400,” Kaplan says, pointing to increased material costs and labor rates.

Insurance costs remain a concern, though there has been some relief as more carriers return to the Florida market, leading to slightly more competitive pricing.

Rental Market Adjustments

The rental market is also in transition, with many rental rates not covering mortgage payments for recent property purchases. Kaplan, however, remains optimistic about the upcoming winter season.

“In Southwest Florida, our season is winter time, so we are rocking and rolling right into it. I’m already seeing the car haulers hauling everyone’s vehicles down. Traffic has already exploded,” she says, expressing hope that the influx of seasonal residents will provide support for the market.

Emerging Opportunities for Investors

For those seeking undervalued opportunities, Kaplan suggests looking to LaBelle, a rural community inland from Fort Myers with minimal HOA restrictions and stable, long-term tenants.

“Those tenants there, they rent your house, they live in there year after year. So it’s less of a transient town like Fort Myers,” she explains.

Cape Coral Foreclosure Trends

One area drawing Kaplan’s attention is Cape Coral’s foreclosure rate, which currently ranks among the top cities nationally for foreclosures. She attributes this to investors and homeowners who overpaid during the 2020–2021 boom and can no longer sustain their mortgage payments as rental income has declined.

“I’m very curious in these next few months, once those foreclosures come into fruition, how that will affect the housing market there, because I feel like investors are going to gobble up more of those properties, turn them into rentals,” Kaplan observes.

Looking Ahead: Key Variables for Market Stability

The factors that will shape Fort Myers’ investment appeal over the next 12 to 24 months include continued hurricane-free seasons and further stabilization of the insurance market as more carriers return to Florida.

“Another year of no major storms” tops Kaplan’s wish list, along with continued improvement in insurance carrier availability and more competitive pricing.

As Southwest Florida moves through this transition, the market is finding a new equilibrium that reflects both the region’s enduring appeal and the realities of climate risk, insurance costs, and economic fundamentals that now define Florida real estate investment.