Cape Coral’s Market Reality Check: What’s Actually Happening on the Ground

Written by:

Steve Marcinuk

Date:

27 Jan 2026

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When the Wall Street Journal declared that Cape Coral had “the worst housing market in the United States,” local real estate veteran James Sommers, leader of James Sommers Team, saw something different in the headlines. Instead of panic, his phone started ringing with clients asking for clarity.

Sommers, who has sold real estate in the Cape Coral–Fort Myers area since 2003, was skeptical of the article’s perspective. “The person who wrote that article was a realtor I’d never heard of,” he says, noting the author bought at the market’s peak. “I’m sure he was like every other COVID agent who got into real estate because it was easy money.”

For Sommers, this kind of national attention is less a crisis and more a test of fundamentals. Reviewing recent market activity, he points out that in a single week, Cape Coral logged 200 new listings and 131 homes under contract. “That means up to 262 realtors are getting paid next month, and 131 title companies have business to do,” he says. In his view, business is still happening—just not at the frenzied pace of the pandemic.

Cape Coral’s Distinct Market Structure

Cape Coral’s real estate market operates differently from many in Florida. The city spans 125 square miles, houses 220,000 residents, and contains about 100,000 vacant, buildable lots with existing development rights—a holdover from its master-planned origin in the 1950s.

Anyone can buy a vacant lot—currently starting around $40,000—and hire a builder to construct a home for resale. This ease of entry has shaped Cape Coral’s cycles, especially during booms.

The COVID era dramatically reduced inventory. Before the pandemic, the market typically had about 2,000–2,200 single-family homes for sale. That figure plunged to just 300–400 during the peak, helping fuel price increases of 43–44% from 2019 to April 2022.

Now, inventory has rebounded to roughly 3,600 homes, and about a third of those are brand-new builds from recent years. “All the new stuff is gray and modern and shiny, so your old brown home is now competing with a brand new shiny house,” Sommers says. Sellers of older homes face tougher competition from new construction, forcing them to adjust expectations and pricing.

Hurricane Ian’s Lasting Impact

Hurricane Ian changed the market in ways that go beyond storm damage. Before Ian, Cape Coral had never experienced significant flooding. The storm, however, led to a dramatic jump in insurance premiums and shifted buyer priorities.

Sommers’s own homeowner’s insurance more than doubled, from $2,500 to $6,000 a year. Flooding mostly hit homes built before 1984, when FEMA updated flood maps. “You can tell if a house flooded by looking at the pictures online. If it’s a 1984 house and it’s brand new inside, you know what that is,” he explains.

Rather than disappearing, buyers have adjusted. Cash buyers looking for $500,000–$650,000 gulf-access pool homes from the 1960s and 1970s often self-insure and treat these properties as future teardowns. “For decades, small, cheap Gulf-access homes in the most desirable parts of Cape Coral have been called knockdowns. You buy the little house at the same price as the land, then plan to knock it down in five to ten years and build what you want,” Sommers says.

First-time buyers, meanwhile, are moving north of the city to avoid flood zones and keep costs down. These buyers prioritize lower taxes and insurance premiums to maintain affordability.

Migration, Vacation Rentals, and Buyer Mix

The domestic migration that fueled Cape Coral’s boom has slowed, but Sommers argues this was inevitable. “We had a heavier flow than normal because people were escaping shutdown cities and states while working remotely. Why be stuck in Manhattan or Chicago in January when you can come to Florida?”

International buyers remain a factor, especially Germans, who benefit from direct flights to the region. Canadian buyers have pulled back, partly due to political tensions and exchange rates, shifting some of their investments elsewhere. “They said it wasn’t political or personal—it’s the people we deal with, not the politicians—but they moved their investments elsewhere,” Sommers says.

The vacation rental market has also changed. With more Airbnb listings and declining profitability, many owners are now putting fully furnished rentals up for sale, adding to the inventory.

A Veteran’s View of Recovery and Risk

Sommers draws on experience from the 2008 crash and multiple hurricanes to put today’s market in context. He sees current conditions as challenging but not dire.

“Every seller is unhappy—they’re not getting two- and three-year-old prices. Every buyer thinks it’ll be cheaper next year, that interest rates will drop,” he says. “But each buyer and seller has a polarizing life reason they can’t wait—death, debt, divorce, or moving for a job.”

This cycle is fundamentally different from 2008. Back then, loose lending and speculative building led to a foreclosure wave. Today, most buyers use cash or conventional loans, as they did during the boom, and many have built significant equity.

Distressed sales remain rare. Of 2,683 single-family homes for sale, only 40 are short sales, and 19 are foreclosures. “Anyone who owned their home before June 2019 is good. Not only is their value still there, but they’ve been paying their mortgage for years—they have equity,” Sommers says.

Back to Normal, Not Back to the Boom

Sommers doesn’t expect Cape Coral prices to return to COVID-era highs. “I don’t see our real estate market in the next five years hitting COVID boom prices, just because that was an artificial, weird thing that happened.”

He compares the market to beer pricing: “It’s like a draft beer. You can get a 60-ounce draft beer for $2 at some restaurants and $6 at others. At the Super Bowl, that same beer costs $30. The COVID Super Bowl is over—we’re going back to regular pricing.”

This correction is bringing some positive shifts. The number of agents is dropping as those who entered during the easy-money phase leave, leaving a more experienced group. “It’s more experienced people who aren’t in a hurry to get you into a contract because they need the money,” he says.

Infrastructure is improving steadily. The southern 60% of Cape Coral now has city water and sewer, with expansion continuing north. Builders are applying lessons from Hurricane Ian, adding impact windows and building to higher elevations in accordance with updated codes.

Underlying Strengths Remain

Despite headlines, Sommers insists Cape Coral’s fundamentals are strong. The region offers a warm climate, waterfront lifestyle, and affordability compared to other Florida cities.

The upcoming Parade of Homes—a three-weekend showcase of new construction—illustrates the market’s ongoing activity. “You’re seeing the new styles, new colors. You’re talking to people you haven’t seen since last year. We’re reinvesting in our relationships, and it’s fun again,” he says.

For investors and industry professionals, Cape Coral still offers what drew buyers in the first place: access to water, relative affordability, and ample room for development. The main challenges now are higher insurance costs and a larger, more competitive inventory—but not a collapse in demand or value.

“Cape Coral is an affordable waterfront community. We’re not Naples, not Marco Island, not Miami. It’s very nice, very middle-class, spotless. It’s safe, there’s stuff to do,” Sommers says. “We’re just getting back to normal.”

Looking Ahead: What Normal Means Now

Cape Coral’s market is adjusting to a more sustainable pace. Prices are no longer inflated by pandemic-era demand, and buyers are more cautious, weighing insurance and long-term costs. Sellers must recognize that the days of bidding wars and rapid appreciation are over. The region’s appeal, waterfront access, growth potential, and a stable community remain intact.

As investors and buyers recalibrate expectations, Cape Coral’s real estate market is settling into a new normal defined by realistic pricing, increased professionalism, and gradual, resilient growth. Despite the headlines, the fundamentals that built Cape Coral’s reputation are still in place, and for those willing to adapt, opportunity remains.