Predictions for 2025: What to expect in residential real estate

Happy New Year 2025

While no one can be entirely sure of the outcome, buyer preferences, economic conditions and innovation/tech will continue to be the key drivers in 2025. One thing is for sure, the real estate landscape is evolving and I for one am looking forward to any challenges the year may bring. On the administrative side 'clear cooperation' as we know it ends: Homeowners will now have more  control over how they market their homes. For instance buyers can now ask agents to remove days on the market and price drop history on portal sites. Additionally agents will now be able to include their full contact information on their listings which means that buyer enquiries on the public end will now go directly to the agent who presumably knows more about the property than any other party to the transaction. 

1. Moderate Price Growth and Increased Supply


Housing prices are expected to grow moderately by 2.6%-4%. Unlike the boom of previous years, this steady rise should result in a more balanced market.

On the inventory side (depending on location), buyers should have more options which will lead to less competition.


2. Mortgage Rate Stabilization

After a period of volatility, mortgage rates are expected to stabilize at around 6.5 to 7% resulting in more predictability for buyers and sellers, which should encourage more market activity.

3. Regional Growth in Suburban Areas

Suburban Appeal: A relatively disproportionate number of families and professionals will continue to be drawn to suburban and exurban areas due to lower costs, more space, remote work, and improved infrastructure.

Emerging Hotspots: Cities like Charlotte, Knoxville, and regions in Texas and Florida are experiencing strong demand due to economic opportunities and lifestyle benefits.

4. Smart and Sustainable Homes


Smart Features: As per my recent series on green energy, an increasing number of buyers are prioritizing (or retrofitting) homes that are equipped with advanced smart technologies, such as energy-efficient appliances, security systems, and home automation.

Sustainability: Eco-friendly designs, solar panels, and regenerative landscaping with native plants are becoming more mainstream and that is very much expected to continue. 


5. Lifestyle-Driven Designs

Multi-Generational Living: the demand for homes with accessory dwelling units (ADUs) and or flexible floor plans is also expected to continue.  

Work-From-Home Adaptations: Similarly homeowners are expected to prioritize for a dedicated home office with high-tech features.

6. Rise of Build-to-Rent Communities

Affordable Rentals: Build-to-rent developments cater to families and individuals seeking single-family homes without the commitment of ownership.

Community Living: These neighborhoods often feature shared amenities like parks, gyms, and co-working spaces, blending the benefits of homeownership with rental flexibility.

7. Customization and Personalization

DIY Interiors: Homebuyers are increasingly drawn to properties they can customize as a means to reflect their personality. For those who are not so inclined and or need advice as to what might work within a particular space for years to come, I am always more than happy to share my insights. 

Local Materials: Sustainable building practices that utilize locally-sourced materials are increasing in popularity for aesthetic and environmental reasons.

As far as paint colors, this year will likely be the year of green paint. Many designers are huge fans of this color and its myriad shades. According to interior designer Linette Dai, earthy and warm neutrals and browns—such as the Pantone color of the year Mocha Mousse—creamy beiges, and chocolate brown are bound to trend in the coming months. "Colors that evoke nature are still very much coveted, but we are going moodier and richer than prior years," she says. "These will look fantastic everywhere from the walls to cabinetry."

8. Regional Trends in Design

Climate-Responsive Designs: Homes in warmer regions incorporate energy-efficient designs and features like shaded patios and or drought-tolerant landscaping.

Smaller Footprints: Urban areas see a rise in demand for smaller homes and micro-apartments that maximize functionality without sacrificing quality.

9. Technology-Driven Buying Experience

Virtual Reality Tours: Homebuyers increasingly rely on virtual and augmented reality tours for remote property viewing, and similarly real estate professionals like myself and their seller clients are able to benefit from the ever evolving AI-driven enhancements in such things as virtual staging.  


AI in Real Estate: AI of course is everywhere and it's just the beginning. For instance, there are numerous tools to help buyers and their representatives in targeting, finding and scrutinizing potential properties. Realtors/real estate agents, loan officers, home inspectors and other industry professionals like myself, while indispensable to the process, are well advised to adopt/integrate these ever evolving tools into their business practices in order to stay relevant and productive.




10. Investment in Rental Properties

Rent Demand: A growing preference for renting among millennials and Gen Z continues to drive demand for high-quality rental properties.

Short-Term Rentals: Markets in tourist hotspots are thriving as more people invest in vacation rental properties as a means to capitalize on travel trends financially.

IN CONCLUSION

The one thing we can be certain of in 2025 is that a home will continue to be the biggest purchase we make in our lives and that the process whereby we find and purchase homes will continue to depend on the interplay between us and technology and of course the economic conditions that surround us. 

As always, thank you for reading and feel free to comment or like the post...



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