From the worst market to a luxury oasis: Florida’s real estate rebound
Two Florida coastal towns tell contrasting stories about the state’s housing cycle: Cape Coral, long labeled the worst housing market in America, and Naples, a magnet for billionaire buyers seeking waterfront luxury. The Wall Street Journal noted in late June that about 8% of Cape Coral homeowners were underwater and that prices had fallen in 12 of the last 13 months. In stark contrast, Naples and its surrounds are witnessing a thriving luxury market where developers push villas and condos at seven- and eight-figure prices, attracting buyers from New York, California, and beyond.
Why this split matters: signs of rebalancing, not collapse
Market leaders say the divergence signals rebalancing rather than a collapse. Bajh Haski, CEO of Premier Sotheby’s International Realty, told reporters that if you had to pick one word, it would be “rebalancing,” pointing to a surge in pending deals over the past four months compared with last year. Ed Yhn, senior vice president at Kolter Urban, expressed confidence that Naples will enjoy a solid season, a momentum that could lift the broader Southwest Florida market as buyers chase luxury and lifestyle.
Price dynamics and the “balancing act”
The WSJ report highlighted a broader price performance: prices rose by roughly 75% from the pandemic peak regionwide, then cooled amid high demand, storms, and shifting buyer interest. Naples now sits well above Cape Coral in average home price. Zillow data cited in the piece put Cape Coral’s average at about $343,431, while Naples commands a much higher mark. In Naples, waterfront properties typically range from $5 million to $10 million, reflecting the draw of coastal living. Developers are responding with projects like Olana Residences, a 12-unit boutique high-rise by Kolter Urban, built to cater to a clientele seeking luxury, convenience, and scarcity all in one place.
Olana and the new buyer profile
Olana Residences illustrates a shift toward “lock-and-leave” luxury living. Haski notes distinct buyer profiles between Naples and Cape Coral—wealthier, more diversified buyers in Naples, and a different risk-and-return calculus in Cape Coral. This divergence helps explain why Naples can support ultra-luxury pricing even as Cape Coral experiences a broader slowdown.
Demographics and mobility among buyers
Yhn emphasized evolving buyer demographics, with many buyers becoming primary residents rather than second-home owners. He also observed a regional migration from states like Texas and California, attracted by Florida’s climate, lifestyle, and, in Naples, the permanence of a high-end, amenity-rich environment. The shift toward a residential-first mindset supports a more resilient demand base for condominiums and luxury towers like Olana.
Risks, resilience, and the road ahead
Insurance costs and hurricane exposure remain realities for South Florida housing. The National Association of Realtors reports insurance hikes placing additional monthly burdens on homeowners. Yet Haski and Yhn remain optimistic about the long-term durability of Southwest Florida’s markets. They point to ongoing construction innovation—more resilient, though costlier—that could attract higher-income buyers who value security and style alongside coastal access.
Bottom line: a region in transition
In sum, Cape Coral’s struggles and Naples’ luxury ascent illustrate a Florida real estate market rebalancing rather than collapsing. For buyers and investors, Naples offers a bright spot—a signal that the state’s housing market can diversify, absorb storms, and continue to attract wealth through a blend of high-end condos, waterfront estates, and thoughtfully designed developments like Olana.
