The Worst Housing Market in America Is Now Florida’s Cape Coral

Thousands found an inexpensive slice of paradise in Cape Coral, a city with more canals than anywhere else in the world. Househunters were so taken with this boating community on Florida’s west coast that many purchased homes sight unseen during the early years of the pandemic. The median home price soared nearly 75% to $419,000 in three years, transforming the character of this middle-income community that for decades has catered to retirees and small investors. Now, three years later, “For Sale” signs line every other block. Open houses are deserted for hours. Foreclosures are ticking up. Home builders are listing half-built shells at discounts as they abandon projects to cut losses. Locals say the lack of traffic has led to an increase in vehicles speeding through empty residential streets. “Cape Coral is the worst housing market in America right now,” said José Echevarria, a Realtor. “I don’t think we’re at the bottom yet.” Home prices for Cape Coral-Fort Myers have tumbled 11% in the two years through May, the most of any major metro area, according to an analysis for The Wall Street Journal by the listing site Homes.com. The area’s home prices have declined for 12 out of the past 13 months, and 52% of the homes have experienced price cuts, according to Parcl Labs, a real-estate data-analytics company. While that is more than nearly anywhere else in the U.S., neighboring communities such as Sarasota and Tampa are in a similar bind. Cape Coral also has the most homeowners underwater in the country, with nearly 8% owing more on their mortgages than their homes are worth. Echevarria recently hosted an open house in Cape Coral. The home, bought three years ago by an investor looking to rent it on Airbnb, is fully furnished and has a pool. The asking price started at $675,000, but the seller has cut it to less than $500,000, about $100,000 below the purchase price. It has been on and off the market for a year and has received zero offers.