Climate Risk, Insurance Hikes & the Cape Coral Market: What Buyers and Sellers Need to Know in 2025

July 23, 2025 | Blog

Cape Coral has long been known for its sunshine, boating canals, and waterfront living. But in 2025, new forces are reshaping the housing market—and they have nothing to do with palm trees and everything to do with climate risk and rising insurance premiums. National media outlets have labeled Cape Coral as one of the most vulnerable housing markets in the country. So what does this mean for buyers, sellers, and investors?

At Miloff Aubuchon Realty Group, we’re here to help you navigate this evolving landscape with data, strategy, and confidence.

Climate risk is no longer a distant concern – it’s a real estate market driver. Rising sea levels, increased flooding potential, and more frequent hurricanes have placed Southwest Florida, including Cape Coral, under increased scrutiny from insurance companies and lenders.

Recent reports show:

• Homeowners in flood-prone areas are seeing premiums rise by 50% or more.
• FEMA and private insurers are tightening coverage or withdrawing from some zip codes.
• Flood zone remapping is placing more homes in high-risk categories.

Buyers are asking tougher questions about long-term risk. Sellers are adjusting prices to stay competitive. And insurance is now a deciding factor in many real estate transactions.

The average cost of homeowners insurance in Florida is now nearly 4x the national average, and in Cape Coral, premiums have jumped dramatically in the last 12 months.

For example:

• A waterfront home that cost $3,500/year to insure in 2020 may now exceed $8,000/year.
• Buyers are factoring these costs into their total monthly housing budget, affecting what they can afford.

 

Tip for Sellers: Make sure your listing includes current insurance quotes. It can be a powerful selling tool and reduce transaction friction.

Tip for Buyers: Work with a local insurance agent early in the process. Understanding potential premiums before you make an offer could save you thousands.

Cape Coral has seen price corrections in 2024 and early 2025. According to recent industry data:

• Over 50% of active listings have seen price reductions.
• Many 2023-2024 buyers are now underwater on their mortgages.

But it’s not all bad news.

• Inventory levels remain healthy.
• Buyer demand continues, especially from cash buyers and out-of-state retirees.
• Newer construction with modern building codes and lower risk profiles still commands strong value.

Whether you’re buying or selling, it’s essential to work with real estate professionals who understand the local nuances—and how climate and insurance dynamics impact your decisions.

For Sellers:

• Consider a pre-listing inspection to identify potential insurance red flags.
• Be prepared to negotiate around flood zone status or insurance costs.
• Highlight hurricane protection features and newer roofs/windows.

For Buyers:

• Prioritize properties built after 2002 for better wind and flood protection.
• Explore inland or elevated neighborhoods for lower insurance risk.
• Partner with a real estate professional who understands zoning, permitting, and FEMA maps.

Our agents are not just experts in real estate – they’re deeply connected to Cape Coral and the surrounding community and stay informed on shifting market conditions, including climate-related impacts.

We provide:

• Access to trusted insurance professionals.
• Strategic pricing advice based on current market realities.
• Marketing that emphasizes your home’s resiliency features.

Don’t let headlines shape your decisions. Let data, local expertise, and personalized strategy guide you. Whether you’re buying, selling, or investing in Cape Coral, Miloff Aubuchon Realty Group is your trusted partner in navigating today’s complex market.

Contact us today to schedule a consultation or receive a free property evaluation.