When Maria Delgado bought a three-bedroom house in Cape Coral, Florida, in early 2022, her agent told her she was lucky to get it. Multiple offers had pushed the price $40,000 above asking. Three years later, comparable homes on her street are listed for less than she paid, and some have sat on the market for months. “I don’t regret buying my home,” she said, “but the number on Zillow is hard to look at.”
Delgado’s experience is now backed by federal data. Home prices in the Cape Coral-Fort Myers metro fell 9.1% over the 12 months ending in the fourth quarter of 2025, the steepest annual decline among the nation’s 100 largest metropolitan areas, according to the Federal Housing Finance Agency’s House Price Index. Denver followed with a 2.2% drop, and Tampa posted a 2.1% decline.
Nationally, the FHFA’s purchase-only index still rose 3.1% year over year. That gap matters: these metros are not simply cooling. They are moving in the opposite direction of the broader market. Across the 50 largest U.S. metros, roughly half now show annual price declines, according to the FHFA’s downloadable summary tables. The list includes Austin, San Antonio, several mid-sized Florida markets, and a handful of Mountain West cities. It is a sharp reversal from the pandemic era, when nearly every major market posted double-digit gains in the same index.
Why Cape Coral’s Drop Stands Out
The FHFA index uses a repeat-sales methodology, tracking the same properties across multiple transactions sourced from Fannie Mae and Freddie Mac loans. That design filters out distortions caused when the mix of homes sold shifts from quarter to quarter, making it one of the most reliable public measures of true price movement.
By that measure, Cape Coral’s 9.1% loss is not a statistical quirk. It reflects real equity erosion for homeowners who bought during or after the 2020 to 2022 boom, when the metro ranked among the fastest-appreciating in the country. The FHFA summary tables confirm the figure and show that the decline accelerated through the second half of 2025.
Multiple forces are hitting Southwest Florida at once. Property insurance premiums across the state have surged since 2022, with the Insurance Information Institute documenting average annual increases that have added hundreds of dollars a month to carrying costs many owners did not face at the same scale when they purchased. Homeowners association special assessments, particularly in condo buildings subject to post-Surfside structural inspection mandates, have piled on additional financial pressure. Meanwhile, active listings in the Cape Coral-Fort Myers area roughly doubled from their year-earlier level by the fourth quarter of 2025, according to Realtor.com inventory data, handing buyers leverage that sellers had not faced in years.
Ken Johnson, a housing economist at Florida Atlantic University who tracks overvaluation in Florida metros, has described Cape Coral’s correction as a textbook case of a market that overshot on the way up and is now repricing to match what local incomes can support. His team’s published research at FAU’s housing market analysis has consistently flagged the Cape Coral metro as one of the most overvalued in the country since late 2023.
Denver and Tampa: Different Economies, Similar Trajectory
Denver’s 2.2% decline marks the second consecutive quarter of negative year-over-year readings, a notable turn for a market that had been one of the steadiest appreciators in the Mountain West for over a decade. Affordability has become a hard ceiling: the median home price in the Denver metro remains above $550,000, according to the Colorado Association of Realtors, and mortgage rates near 7% have priced out a significant share of first-time buyers. New-home construction in the northern suburbs has also added supply faster than the market can absorb it.
Tampa’s 2.1% drop mirrors dynamics playing out across much of Florida’s Gulf Coast. Like Cape Coral, Tampa has contended with rising insurance costs and a surge in listings after years of tight inventory. But Tampa’s decline is more moderate in part because its economy is more diversified. A larger base of healthcare, finance, defense, and tech employment anchors local demand in ways that Cape Coral’s tourism-and-retiree-heavy economy cannot match.
Other metros posting declines in the FHFA data include Austin, San Antonio, and several mid-sized Florida markets such as North Port-Sarasota and Lakeland. The pattern is clearest in two categories: Sun Belt cities that saw the most extreme pandemic-era run-ups, and metros where new construction has outpaced household formation.
What the National Numbers Hide
The 3.1% national gain reported by the FHFA masks a widening geographic split. Northeast metros like New York, Boston, and Hartford posted appreciation well above the national average, buoyed by limited housing stock and strong job markets. Several Midwest metros, including Chicago and Cleveland, also showed gains after years of underperformance.
The result is a housing market that has fractured along regional lines. Some areas remain supply-constrained and fiercely competitive. Others have tipped into buyer-friendly territory for the first time since before the pandemic. That divergence has no close parallel in recent history outside the years immediately following the 2008 financial crisis, though the current declines are far smaller in scale. During the worst of that downturn, metros like Las Vegas and Phoenix lost more than 50% of their peak value. Cape Coral’s 9.1% drop, while painful for recent buyers, is a correction, not a collapse.
The FHFA data does not break results down by neighborhood, property type, or price tier, so a metro-wide decline does not mean every home in that area has lost value. Waterfront properties in Cape Coral may be on a different trajectory than inland starter homes. Condos in Denver’s downtown core face different pressures than single-family houses in the suburbs. The index is a directional signal, not a substitute for recent comparable sales in a specific market.
How Rents Are Moving in These Declining Markets
Readers watching home prices fall in these metros will naturally wonder whether rents are following the same path. The picture is mixed. In Cape Coral, the surge in for-sale inventory has pushed some owners to convert unsold properties into rentals, adding supply to a rental market that was already loosening. That additional competition among landlords has put downward pressure on asking rents in the metro, particularly for single-family rentals and newer apartment units that came online during the construction boom of 2023 and 2024.
In Denver, rents have softened modestly after years of rapid growth, largely because a wave of new apartment deliveries in 2024 and early 2025 gave tenants more options and reduced the urgency that had driven bidding wars for leases during the pandemic. Tampa’s rental market has followed a similar pattern, with new multifamily supply helping to cool rent growth even as the metro’s diversified job base keeps occupancy rates relatively stable.
The broader takeaway is that in metros where home prices are declining, rents are generally flat or easing as well, driven by many of the same supply increases and affordability pressures. For prospective buyers weighing whether to purchase in a softening market, comparing current mortgage payments (including insurance and taxes) against local rents remains one of the most practical ways to gauge whether buying makes financial sense in the near term.
What Buyers and Sellers in Declining Markets Should Watch This Summer
For owners in declining metros, the pressing question is whether these drops deepen or stabilize. The FHFA is expected to release first-quarter 2026 data by late June 2026, which will reveal whether the trend accelerated as spring buying season got underway. Mortgage rates remain the single largest variable: a meaningful drop in rates could pull enough buyers back to arrest price declines. If rates hold near current levels, markets sitting on elevated inventory and high carrying costs are likely to keep softening.
Buyers eyeing Cape Coral, Denver, or Tampa have more negotiating room than at any point in the past five years, but falling prices alone do not guarantee a good deal. Insurance costs, HOA fees, property taxes, and the trajectory of local employment all factor into whether a lower sticker price translates into genuine affordability. In Cape Coral especially, buyers should budget for insurance premiums that may continue to climb and should verify flood-zone designations and any pending special assessments before making an offer.
Why Regional Data Now Matters More Than National Headlines
For the broader market, the fact that roughly half of the 50 largest metros are now posting annual declines is a structural shift, not a blip. Prices are still rising in more metros than they are falling, and the declines outside Cape Coral remain modest. But the era when virtually every major U.S. housing market moved upward in lockstep is over. That introduces a level of regional risk that buyers, lenders, and policymakers have not had to navigate since before 2020, and it makes local data far more important than national headlines for anyone making a housing decision in the months ahead.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
