Cape Coral, Florida: From a popular retirement city to the worst housing market in the country

Cape Coral, Florida, has long been a livable city favored by retirees, but now house prices have shrunk by about one city from the peak two or three years ago. Coupled with factors such as excessive construction of new houses and heavier insurance costs, it has now become the “worst housing market in the country.” Real estate agents warn that more blows may emerge.

The Wall Street Journal reported on the 30th that at the beginning of the COVID-19 outbreak, Cape Coral, which has more waterways than any other city in the world and affordable housing prices, was favored by thousands of real estate speculators, who bought houses in large quantities only through Zoom video calls. The median house price in Cape Coral has risen by nearly 75% in three years to 419,000 yuan. The characteristics of the boating community that has been a middle-income community for decades have changed significantly.

Now, three years later, there are houses for sale on almost every street, and open houses are empty for several hours, and there are more cases of houses being foreclosed by banks. Builders are selling half-finished homes at a loss, while residents say fewer cars are causing more people to speed on now-empty residential streets.

“Cape Coral is the worst housing market in the country right now,” said José Echevarria, a real estate agent. “I don’t think we’ve hit bottom yet,” he said.

In the two years through May, home prices in the Cape Coral-Fort Myers metropolitan area fell 11%, the biggest drop among major metropolitan areas in the country, according to Homes.com. Cape Coral has the worst problem of “underwater mortgages,” where the amount owed exceeds the value of the home, with nearly 8% of residents in the country under it.

Echevarria recently held an open house in Cape Coral that an investor bought three years ago to rent out on Airbnb. The house is fully furnished and has a swimming pool, and the asking price was $675,000, but visitors bargained down the price to $500,000. The house has been on the market for about a year, with few buyers.

At the peak of the migration boom, there were 3,500 houses for sale in Lee County, where Cape Coral is located. Now the number has increased to 12,000.

Tim Gaines and his wife Julie Gaines live in the most sought-after community in Cape Coral. The house has all hardwood cabinets, high ceilings, and a swimming pool. They thought it would be easy to resell the house, but unexpectedly, the price has been reduced 15 times in two years and it has not been sold. Julie said that now she just hopes that if the house can be sold, she will not lose too much money.

Since 2022, the western coastal areas of Florida have been frequently hit by hurricanes, and many houses have been flooded. Insurance prices have risen sharply, and some insurance companies have withdrawn from the local market.

Sherri Sprinkle, who moved to Cape Coral from Chicago in 2022 for work, was laid off last year and is now glad she chose to rent instead of buying a house, otherwise she would be stuck at a high housing price. She said that the salary in Cape Coral is simply not enough to keep up with the living expenses. “It’s a paradise, but there are no jobs.”