Naples Housing Market Cools as Prices Slide Nearly 7%

Naples, Fla. — After years of soaring real estate prices and bidding wars that became emblematic of Florida’s pandemic-era boom, the Naples housing market is finally losing some of its heat. A new report shows that home prices in the city have fallen 6.7% year-over-year, marking one of the most significant cooldowns the area has seen in more than a decade.

Real estate analysts say the shift isn’t unexpected — but it is notable.

For much of the past four years, Naples was among the nation’s hottest luxury markets, fueled by an influx of remote workers, high-net-worth buyers, and investors seeking Florida’s tax advantages. But the forces that supercharged that growth are now colliding with the pressures straining homeowners across the state.

High mortgage rates remain one of the biggest drivers behind the cooling trend. With many buyers locked into pandemic-era mortgage rates as low as 2–3%, fewer homeowners are willing to sell, shrinking inventory but also lowering buyer demand. Meanwhile, new buyers face borrowing costs that make Naples’ already-expensive market even harder to afford.

At the same time, rising insurance premiums — which have surged sharply across Florida as insurers struggle with hurricane risks and financial instability — are pushing some buyers out of the market entirely. Annual premiums that once hovered around $3,000 can now exceed $10,000 or more for coastal or older properties, a cost many prospective homeowners simply can’t absorb.

The third piece of the puzzle is a market correction that economists say was inevitable. Naples home prices exploded by double digits during the pandemic as wealthy buyers from across the U.S. raced to secure second homes and permanent residences in the region. With that frenzy now gone, values are settling closer to sustainable levels.

Local realtors say the downturn isn’t a crash — more like a reset.

“Naples is still a highly desirable place to live,” said one real estate analyst. “We’re just seeing the market return to something resembling normal after unprecedented growth.”

Despite the price drop, the market remains competitive in certain segments, particularly new construction and properties under $600,000, where inventory remains tight. Luxury properties, which soared the fastest during the pandemic, are seeing the steepest slowdowns.

Economists will be watching the coming months closely as interest rates are expected to stabilize, and Florida lawmakers continue to debate insurance reforms aimed at easing pressure on homeowners.

For now, the cooling trend may offer a rare window of opportunity for Naples homebuyers — something the region hasn’t seen in years. But with the state’s broader economic pressures still unresolved, experts say any rebound is likely to be gradual rather than dramatic.