For real estate investors keeping an eye on Southwest Florida, the landscape is shifting. If you’ve been watching cities like Punta Gorda, Cape Coral, or Fort Myers, you’ve probably noticed headlines about falling home values and rising rental inventories. But what’s really happening — and what does it mean for landlords and investors on the ground?
As someone who’s been a landlord and property manager in this region for over 30 years, let me walk you through the latest data and what it means for your portfolio.
1. 🧭 Market Overview: From Boom to Correction
In July 2022, per Resiclub, Southwest Florida saw its most recent real estate price peak. Since then, we’ve experienced notable market corrections:
Punta Gorda: -25.3% since July 2022
Cape Coral: -18.8%
North Port: -17%
Naples: -12%
These numbers might trigger concern — but take a broader look, and the picture changes.
2. 📈 Long-Term Value Still Strong
When you zoom out to March 2020, as Resiclub does — the start of the pandemic and Florida’s massive influx of out-of-state buyers — the 5-year growth tells a more optimistic story:
Punta Gorda: +28.9%
Cape Coral & North Port: +37 & 38%
Naples: +52%
So, yes, prices have dipped since the peak, but most investors are still significantly ahead on property values if they bought during or before the pandemic.
“Even after a 25% drop, a long-term hold investor in Punta Gorda is still sitting on nearly 30% appreciation since 2020.”
— Michael McVety, Red Fortunes PM
3. 🏡 Rental Inventory: More Choices for Tenants, Strategy Shift for Landlords
Here’s where landlords and property managers need to stay sharp — rental inventory is climbing.
Three-bedroom single-family homes (the most common rental class) show the following year-over-year increase in available units:
Area | % Increase (2024–2025) | # of Additional Units |
Fort Myers | +44% | +226 |
Cape Coral | +18% | +179 |
Lehigh Acres | +53% | +299 |
Port Charlotte | +52% | +126 |
Naples | -1.7% | -23, a Mild decline |
This increase signals more competition for landlords — especially in Lehigh Acres, Port Charlotte, and Cape Coral, where the inventory is expanding quickly.
4. 📊 Economic Indicators You Should Be Watching
Unemployment:
Currently at 5.4% in Southwest Florida
Up from 4.5% in July 2025
Not catastrophic, but something to monitor
Building Permits for SIngle Family Homes:
Down 27% year-over-year (October 2024 to October 2025)
Signals potential slowdown in future housing supply
Active Listings:
Up 2% year-over-year from Dec 2024 to Dec 2025
Indicates slightly more homes hitting the market, but nothing extreme
Home Sale Prices:
Falling 1–4% in most areas
Reflects the broader cooling trend
5. 🧠 What This Means for Real Estate Investors
The numbers above might feel contradictory: rising inventories and falling prices — yet strong five-year growth. Here's how to make sense of it:
🔑 Key Takeaways:
Long-term value still exists for investors who bought before or during the pandemic.
Rental supply is high, meaning tenants have more choice — landlords need to focus on tenant retention and competitive pricing.
New construction is slowing, which may balance the market over the next 12–24 months.
Now is the time to strategize, not panic. Investors who adapt to market shifts — rather than react emotionally — will come out ahead.
"We're in a market correction, not a collapse. For landlords who play the long game, this is still a promising region to invest in."
— Michael McVety
6. 📍 Local Focus: Cape Coral, Punta Gorda & Fort Myers
If you're a landlord or investor in these cities, here’s a snapshot of local dynamics:
Cape Coral
Still absorbing a large supply of rentals
Home values have dipped, but remain up 37% from 2020
Watch for a potential plateau in rental supply soon
Punta Gorda
Biggest drop in value since 2022 in Florida (-25%)
But still nearly 29% higher than 2020 levels
A correction-heavy area that may stabilize first
Fort Myers
Rental inventory up 44%
Active listings are climbing modestly
Less dramatic on the value drop side
🔮 Looking Ahead: What to Expect in 2026–2027
Stabilization in late 2026: If new construction continues to slow, inventory will stabilize.
Rental rate rebound by 2027: As the supply evens out, rents may start climbing again.
Best opportunities: Landlords who can hold, improve tenant experience, or reposition properties for higher-value tenants will be best positioned.
📬 Final Thoughts from the Field
In the words of a seasoned Southwest Florida landlord:
“The market is adjusting to our overbuilding. Our property values have never gone down over a 10 year period. This adjustment will be corrected in a couple of years .”
— Michael McVety, Red Fortunes PM
Questions or looking for support in navigating this market? Reach out to me at mike@redfortresspm.com.
❓ FAQ: Southwest Florida Real Estate Trends
Q: Should I sell my investment property in Cape Coral right now?
A: Not necessarily. While prices have dropped since 2022, they’re still significantly up since 2020. If you can hold, you may benefit from future rent growth and market stabilization.
Q: Are rental rates falling in Southwest Florida?
A: Yes. Rates are under pressure due to increased inventory, especially in areas like Lehigh Acres and Cape Coral. However, they may start recovering by late 2026 as new builds slow down.
Q: Is it a good time to buy investment property in Punta Gorda?
A: It could be. Values are down 25%, which may present buying opportunities — especially if you plan to hold long term.
Q: How’s unemployment affecting rental demand?
A: While unemployment rose slightly to 5.4%, demand for rentals remains solid, especially in job-stable areas.
