Study ranks Cape Coral as one of the best cities for first-time home buyers. Here's why

Cape Coral has been named one of the best cities for first-time home buyers in the country.

It came in second place based on an analysis by WalletHub, a personal finance company.

After evaluating 300 cities of varying sizes, the company ranked Palm Bay on Florida's east central coast as No. 1. Palm Bay bested Cape Coral by less than two points (when comparing their total scores).

To come up with its rankings, WalletHub weighed 22 key indicators of "market attractiveness, affordability and quality of life." Those indicators included everything from home prices and foreclosures to weather and crime rates.

Other important indicators reviewed for the study? Home inventory and building activity.

While Palm Bay and Cape Coral both ranked near the middle of the pack for affordability, including the cost of housing, food and other essentials, they placed near the top for their favorable real estate market conditions and high quality of life.

WalletHub points to Cape Coral's "extremely high number of active home listings and new building permits per capita," (or per person).

According to Realtor.com, there are more than 6,660 homes for sale and nearly 1,400 for rent in the city. In June, the median listing price for a home was $455,000, down 7% over the year.

"Things have gotten a little better. Probably the biggest thing that we've seen in our data is that rental prices have come down a little bit," said Shelton Weeks, a real estate professor and director of the Lucas Institute for Real Estate Development & Finance at Florida Gulf Coast University.

He's one of three researchers who track rents in the top 100 U.S. housing markets through a monthly index.

After damage from Hurricane Ian in September 2022 reduced the housing supply, rent in Cape Coral peaked at a little over $2,300 a month. Now, it's at about $2,100 a month, Shelton said.

"That's the result of a good bit of inventory being added to the marketplace," he explained. "We've got a lot of new units, and we've got more on the way."

Likewise, home prices are softening, with an increase in supply, from single-family homes to condominiums, Shelton said.

"I do think it's going to continue to improve," he added. "How far we see rental prices or housing prices actually fall is very difficult to predict, but I do think we'll have some marginal improvement as we go forward."

That is unless there is another Ian-like event that reduces supply, Shelton noted.

What else did WalletHub have to say about Cape Coral?

The report states: Cape Coral "leads the country when it comes to real-estate agents per capita, which helps ensure that people are able to find good houses for their needs and makes the process go more smoothly."

Additionally, the study found the city has the 16th-lowest violent crime rate and 12th-lowest property crime rate in the country, with the ninth-best school system.

"So, it’s especially good for home buyers who have children or plan to have them in the future," the report concludes.

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The five best cities for first-time buyers chosen by WalletHub are all located in Florida. Port St. Lucie ranked third, followed by Tampa, then Orlando.

Another city in Florida that ranked high: Lakeland, weighing in at No. 7.

The three others in the Top 10? In order: Surprise, Arizona (6), Boise, Idaho (8), and Gilbert, Arizona (9).

Last on the list: Berkley, California, based on a combination of factors, including expensive home prices and high crime rates.