Seven Real Estate Trends in 2025.

As 2025 begins to unfold and we see patterns develop in real estate, this is a great opportunity to take a step back and look at what trends may rise to the surface over the next several months. The market is constantly evolving, with a wide range of factors contributing to its ebb and flow. This means that keeping up with the current of the market and predicting which turns it may take next is an exciting endeavor for us as realtors! As we look at what 2024 held and take into account some of the biggest factors at play in this new year, I have put together 7 real estate trends to keep an eye out for over the course of 2025!

• Build-to-rent properties will gain popularity. Properties that are built specifically for rental occupancy is a trend that we have seen emerging over the past couple years and looks like it will only grow in popularity in 2025. Investing in build-to-rent properties will grow in its appeal to developers and investors as we will continue to see a drive for affordable housing solutions over the course of this year.
• Housing inventory will increase. January of this year has marked the 15^th consecutive month for inventory growth in real estate. In fact, this January, the number of homes on the market was 24.6% higher than January of the previous year! This is a great sign, as it points to a market growing in overall health. Historically, housing inventory is still low, which means this is an exciting growth trend and will contribute to an increasingly more balanced market.
• The drive for shared workspaces will grow. As many companies have embraced the work-from-home model, and it looks like it may be here to stay, we can expect the need for shared workspaces to continue to grow this year. This is a helpful solution, not only for individuals who work from home and thrive in a space dedicated for this purpose, but is also critical for small businesses.
• We will continue to see a seller’s market. Because demand is outpacing supply in most regions, we will continue to see a market favorable to sellers in 2025. There is a potential for interest rates to decrease over the course of this next year as well, which could drive demand even further, making the market even more conducive to selling. Also worth noting is that there is typically an increase in home sales in the months following an election, so this will also play a role in more buyers entering the scene and contributing to more competitive pricing.
• Property prices are on the rise. Over the course of the year 2024, we saw an increase in home prices of 4.5 percent. As we look ahead into 2025, we can expect that growth to slow but will likely remain at around a 2 percent growth curve for the year. However, this does not mean that you should not consider buying a home this year. There are still many opportunities to find great deals on amazing homes, many of which are brand new. 
• The impact of digital infrastructure is ever-increasing. There are few aspects of life and business that have not been touched by digital innovation. Real estate is definitely no exception! With AI capabilities and technology increasing rapidly, it will continue to play an ever-increasing role in property valuation, marketing, and property management. Within the year of 2025, virtual home tours will become the standard first step in property investment decisions!
• Interest rates may decrease slightly. After two years of skyrocketing interest rates in 2022 and 2023, last year finally brought some reprieve as we saw interest rates moving the opposite direction. In 2025, we will likely see interest rates continue to drop, though not at a rapid rate. It’s looking like this year will see an interest rate stabilizing at around 6.5%. This is good news for those who are interested in buying a home in 2025, as you may be seeing some of the best interest rates we have seen in recent years. 

Although we can make generalized predictions as we look at the market as a whole, it is good to keep in mind that these factors vary greatly based on region, and even quarter to quarter! To understand the state of the market more in-depth, and to discuss what this might mean for your family and your goals this year, do not hesitate to reach out to me and my team for more information and guidance. I look forward to “unlocking new doors” together in 2025!