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Housing Market Predictions for 2025: What to Expect, and Why

• David (Viacheslav) Davidenko • Season 4

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Imagine navigating the 2025 housing market armed with insights that could transform your buying or investing strategy. Discover how a projected 4% rise in median home prices, coupled with fluctuating mortgage rates around 6.8%, might just redefine your approach to real estate. We dive into the complexities of regional rental markets, revealing where you might find a bargain or face a bidding war. Climate change also demands attention, reshaping property values and prompting buyers to prioritize resilience. Reflecting on post-pandemic shifts, we address the allure and challenges of suburban living, from stretched infrastructures to escalating property taxes, and explore how these changes could affect your lifestyle and investment decisions.

Prepare to seize opportunities as we anticipate a dramatic 209% surge in home sales, driven by pent-up demand. We'll guide you through strategic planning in an evolving, competitive market, emphasizing the importance of choosing the right location and weighing climate risks with financial factors. For real estate investors, our discussion offers a roadmap to align market trends with personal values, ensuring investments are not just financially sound but also meaningful. By tapping into resources like www.2060.us, you can stay ahead of the curve and make informed decisions. Whether you're buying a home or looking for your next investment, this episode is your ticket to understanding and thriving in the future of real estate.

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Disclaimer: The content provided on this channel is intended for educational and informational purposes only and does not constitute investment, financial, or tax advice. We strongly recommend that you consult with qualified professionals before making any financial decisions. Past performance of investments is not indicative of future results. The information presented here is not a solicitation or offer to buy or sell any securities or investments. Our firm may have conflicts of interest, and we do not guarantee the accuracy or timeliness of the content provided. Investing involves risks, and you should carefully consid...

Speaker 1:

Welcome to the Deep Dive. Today we're going deep into 2025. Housing market predictions Buckle up, Things might get a little crazy. If you're looking for more real estate insights, be sure to check out our website, www.2060.us. It's full of resources for savvy investors like you.

Speaker 2:

And you'll want to be savvy, because 2025 is looking like a fascinating year. We've gone through the expert opinions and data and we found six key trends that will shape the 2025 housing market. Six trends.

Speaker 1:

Okay, lay it on me. What's the first big one?

Speaker 2:

Well, after that pandemic craziness, it seems like things are finally calming down. Experts are predicting a 4% increase in median home prices for 2025.

Speaker 1:

Oh, wow. So that's like a cool down from the double digit jumps we've seen recently. That's got to be good news for buyers.

Speaker 2:

Yeah, absolutely. A 4% increase should mean a more balanced market, which is good for everybody. But this forecast depends on a few things like tariffs on construction materials and potential changes to immigration laws. You know those could affect the labor force and they could disrupt that stability.

Speaker 1:

So those outside forces could mess things up and send prices back up.

Speaker 2:

Exactly. Speaking of delicate balances, let's talk about the rental market. Nationally, we expect rents to stay flat, which is good for renters, but regional variations are going to create some interesting opportunities.

Speaker 1:

Opportunities. Now you've got me really interested. What kind of opportunities.

Speaker 2:

Okay. So let's say you're a renter in Austin Texas. With all the new apartment construction there, rents could actually go down.

Speaker 1:

Wow, you could find a great apartment in a booming city for less than you thought.

Speaker 2:

Yeah, but there's two sides to every coin, right? High demand areas like New York City and Seattle, but there's not a lot of housing Rents could increase by as much as 5%.

Speaker 1:

Oh, wow. So location is going to be even more important for renters in 2025. Knowing your market and those regional trends could really affect your budget.

Speaker 2:

Absolutely. It's all about being informed and strategic. Now let's talk about mortgage rates. The forecast is about 6.8%, which might seem high to some people 6.8%.

Speaker 1:

Yeah, that's still a lot higher than the low rates we saw a few years ago. Are we stuck with these higher rates for a while?

Speaker 2:

Wow, the 6.8 percent is just an average. What's really important is how much we think they'll change the global economy. Inflation and even those tariffs we talked about earlier could all make rates go up and down.

Speaker 1:

So trying to predict mortgage rates it's like trying to predict the weather you might get a general idea, but you got to be prepared for some crazy storms.

Speaker 2:

Exactly, and that's why it's so important for homebuyers to stay informed, do their research and be prepared for those changes in rates. Locking in a rate at the right time could save you thousands of dollars over the life of your loan.

Speaker 1:

Good advice, but let's move past the numbers for a second and talk about climate change. How is that going to affect the 2025 housing market?

Speaker 2:

This is where things get really interesting. We're seeing people become more aware of climate risks and how they're affecting property values, Homes in high risk areas like coasts that could flood or wildfire zones. They could lose value.

Speaker 1:

That makes sense. Insurance is going up in those areas, and who wants to live with the constant threat of a natural disaster? But is this just a coastal problem?

Speaker 2:

That's what's interesting. We're seeing climate change affecting places that weren't vulnerable before. Recent events have shown that flooding can happen in California's valleys and hurricanes can reach inland North Carolina. Climate risks are spreading.

Speaker 1:

So climate resilience isn't just for beachfront properties anymore. It's a national issue.

Speaker 2:

Exactly when you're looking at a property in 2025, you have to ask yourself is this home built to last? Is it in a location that's safe from climate impacts?

Speaker 1:

It's like adding a whole new thing to your home buying checklist Location, size, amenities and now climate resilience. It's a lot to think about. Speaking of location, we have to talk about the suburbs. The pandemic caused a lot of more space, affordability and that sense of community that people want Bigger houses, bigger backyards and maybe even a white picket fence. It's tempting, especially for families, but I imagine all these new people are affecting the suburbs themselves.

Speaker 2:

You're right. This suburban surge is changing things, literally and figuratively. New construction is booming, but can the current infrastructure handle it? Are the schools ready for all the new students? Can the roads handle more traffic?

Speaker 1:

So it's not just about finding the perfect suburban house, it's about understanding if the community can support this growth.

Speaker 2:

Exactly. It's about finding a suburb that fits your lifestyle and needs, both now and in the future. Speaking of the future, let's talk about home sales in 2025. After slowing down a bit, we expect them to go back up.

Speaker 1:

Go back up. So is it finally time for buyers who are waiting to jump back in.

Speaker 2:

It could be. Pent-up demand is expected to push home sales up by 209% in 2025. But the big question is will those crazy bidding wars we saw during the pandemic finally calm down?

Speaker 1:

I bet a lot of buyers are hoping for a more balanced market where they don't have to fight with 10 other offers just to get a house.

Speaker 2:

There's definitely a chance we'll see things become more buyer friendly. But remember, even in a balanced market, life events still drive those big decisions. People move for jobs, families grow, people retire. These are the things that keep the real estate market going.

Speaker 1:

So while affordability might be getting a little better, those basic life events will keep shaping the market. It's complicated.

Speaker 2:

It is, and we've only just scratched the surface. There's so much more to talk about when it comes to these trends and what they mean for you.

Speaker 1:

Well, hold on everyone, because we're just getting started. We'll be back soon to dive deeper into these 2025 housing market predictions. Don't go anywhere.

Speaker 2:

Welcome back to the Deep Dive. We're picking up right where we left off, looking at those six key trends that could really change the 2025 housing market.

Speaker 1:

You know I'm already feeling a bit more prepared, but I have to admit all this talk about changing mortgage rates and climate risks is making me a little nervous. Is there any good news?

Speaker 2:

Of course, Remember knowledge is power. The more you understand these trends, the better you'll be able to navigate the market and make good decisions, and there are some good things out there.

Speaker 1:

Okay, good, so let's go back to those regional differences in the rental market. You mentioned Austin as a place where renters might find good deals.

Speaker 2:

What's causing that? Well, austin's tech industry has been booming. It's brought in tons of new people, which has led to a lot of new apartment construction. The result more supply and potentially lower rental prices. It's supply and demand.

Speaker 1:

So renters in Austin might have some power in 2025. That's a nice change from the super high rents we've seen in a lot of places.

Speaker 2:

Yeah, exactly, it's a renter's market in some parts of the country, but then you have those popular areas like New York and Seattle where there just aren't enough homes. Renters in those cities might face tougher competition and maybe even higher prices.

Speaker 1:

It really shows how important it is to know what's happening in different areas. What could be great for renters in one city could be a struggle in another. Speaking of struggles, let's talk about those mortgage rates again. You said they're predicted to be around 6.8 percent, but also that they could change a lot. What are some things that could cause those rates to go up and down like crazy?

Speaker 2:

Well, inflation is a big one. If it stays high, the Federal Reserve might keep raising interest rates, which would make mortgage rates go up. But if inflation goes down, we might see rates stabilize or even go down a bit.

Speaker 1:

So we have to wait and see what happens with inflation Exactly.

Speaker 2:

And then there's the global economy. If other countries' economies slow down, it can affect the US economy too, which could then affect interest rates and mortgage rates. And don't forget about those tariffs we talked about. If tariffs on building materials stay high, it could make building more expensive, which could indirectly impact mortgage rates.

Speaker 1:

Wow, it's like this giant puzzle where all the pieces are connected. It makes you realize how important it is to think carefully when making big financial decisions like buying a home.

Speaker 2:

Absolutely, and that brings us back to how important climate resilience is. We've talked about how climate change is affecting property values, especially in high-risk areas, but how can people figure out how climate resilient a property is? What should they be looking for?

Speaker 1:

That's a really good question. I'm guessing it's more than just checking if the house is on a hill. What are some signs that a property is built to handle future climate problems?

Speaker 2:

Well, elevation is definitely important, especially in areas that could flood, but you also have to look at what the house is made of and how it was built. Is it designed to withstand strong winds or heavy rain? Is the landscaping done in a way that manages water runoff and prevents erosion?

Speaker 1:

So it's about looking past what the house looks like and thinking about if it can structurally handle climate risks.

Speaker 2:

Exactly, and it's also about looking at the area around the property. Are there big trees near the house that could be dangerous during a storm? Is the property in a place where wildfires happen a lot? Does it have enough defensible space?

Speaker 1:

Well, it's a lot to consider, but it seems really important to think about these things when making a decision about buying a property in 2025.

Speaker 2:

It is and let's not forget about the community Is the local government doing things to reduce climate risks, like investing in flood control or making building codes stronger? These are all things that can make a property more climate resilient overall.

Speaker 1:

It's like looking at the big picture, from the individual property to the community and even the global trends affecting our climate. It's a lot to think about. But let's change gears a bit and talk about the suburbs again. We mentioned that the pandemic caused a lot of people to move to the suburbs and that this trend is continuing, but are there any downsides to this? Are there any hidden costs or challenges that come with living in the suburbs?

Speaker 2:

One potential downside is what we talked about earlier. The impact on infrastructure. Schools and roads can get too crowded and local governments might struggle to provide enough services. This could lead to higher taxes or a decrease in the quality of those services.

Speaker 1:

So that dream of a big suburban house with a big backyard might come with higher property taxes or a longer commute. It's about deciding what's most important to you.

Speaker 2:

Exactly. And then there's the issue of affordability. While suburbs are usually cheaper than cities, all the new people moving there can drive prices up. We're already seeing bidding wars and rising home prices in a lot of popular suburbs.

Speaker 1:

So that dream of suburban affordability might not be realistic for some buyers.

Speaker 2:

It's definitely something to watch and it shows how important it is to plan carefully and do your research before moving to the suburbs. It's important to understand the local market, how much prices might go up and the overall cost of living.

Speaker 1:

It's like any big life decision you have to do your homework and weigh the pros and cons Before making a move. Speaking of moves, let's talk about home sales again.

Speaker 2:

We're expecting them to rebound in 2025, but what does that mean for buyers and sellers right now? Well, for buyers, a rebound in home sales means there will be more homes to choose from, which could mean less competition and maybe even better deals. But it's important to remember that interest rates and inflation are still factors. Buyers need to be realistic about their budget and be ready to act fast when they find a property they like.

Speaker 1:

So it's not really a buyer's market yet.

Speaker 2:

Not really. It's more like a transition. We're moving away from the strong seller's market we had during the pandemic, but it's still competitive for sellers. A rebound in home sales is usually good news. More buyers mean more potential offers and a higher chance of selling their property quickly.

Speaker 1:

But I imagine sellers still need to be smart about how they price their homes and how they present them. They can't just put up a for sale sign and wait for the offers to come pouring in.

Speaker 2:

You're right. In a more balanced market, how you present and market your property becomes even more important. Sellers need to make their property stand out and appeal to what buyers want. It sounds like everyone needs to be on top of their game in the 2025 housing market, whether they're buying or selling. That's a good way to put it. Knowledge, preparation and strategic thinking are all essential for success in this changing market.

Speaker 1:

We've talked about a lot in this deep dive, but I feel like we've only just started to explore the 2025 housing market.

Speaker 2:

You're right, there's always more to learn and talk about. But before we move on, let's summarize the key points for our listeners.

Speaker 1:

Good idea. Let's turn all this information into something our listeners can use.

Speaker 2:

So what are some important things our listeners should remember as they navigate the housing market in 2025?

Speaker 1:

Well, first of all, location is still super important, but now it's not just about being close to work or amenities. It's also about understanding how the rental market is different in different areas and considering climate risks when looking at properties.

Speaker 2:

Definitely. And let's not forget about those mortgage rates. We think they'll keep changing, so it's really important to stay informed and work with a lender who knows what they're doing.

Speaker 1:

And whether you're buying or selling, it's important to remember that we're in a time of change. The extreme market conditions of the past few years are getting better, but it's still a competitive market.

Speaker 2:

Exactly being prepared, doing your research and thinking strategically are all crucial for success in the 2025 housing market.

Speaker 1:

Well said, but before we wrap up this deep dive, I want to remind our listeners about a great resource for those who want to learn even more about real estate.

Speaker 2:

Oh yeah, if you're looking for more detailed insights, expert analysis and practical tips on real estate investing, be sure to check out www.2060.us.

Speaker 1:

It's an amazing source of information for anyone who wants to understand the real estate market and make smart investment decisions.

Speaker 2:

We'll be back with the final part of our deep dive after a quick break. Stay tuned for more insights on the 2025 housing market.

Speaker 1:

We're back for the last part of our look at the 2025 housing market. We've talked about so much already Cooling prices, regional differences in rent, climate change's impact and the changing suburbs.

Speaker 2:

We sure have. But now comes the important part figuring out what it all means for our listeners.

Speaker 1:

Exactly. We've gone through the trends, analyzed the data and talked about the risks and opportunities. Now let's turn all this information into something our listeners can actually use. So what's the main takeaway? What's the one thing our listeners should keep in mind as they navigate this crazy real estate world?

Speaker 2:

I think the key word for 2025 is balance. We're moving away from the extremes of the past few years the super high prices, the bidding wars, that feeling like you had to make a decision right away.

Speaker 1:

So it's going back to a more normal, predictable market. That's got to be a relief for both buyers and sellers.

Speaker 2:

Yeah, I think so, this shift towards moderation. It suggests a market that's becoming more stable and sustainable. Prices are coming down, the rental market is calming down and, while there are still risks and uncertainties, there's also a sense of careful optimism.

Speaker 1:

Careful optimism. That sounds like a good way to approach any big investment, especially real estate. But beyond the numbers, what are some of the big ideas that are shaping the housing market as we head into 2025?

Speaker 2:

Well, one of the biggest is climate change and its effect on real estate. It's not a far off threat anymore. It's something that's affecting buying decisions right now.

Speaker 1:

So buyers need to think about more than just location, size and amenities. They have to think about if a property can handle future climate problems. It's like adding a whole new thing to the home buying checklist.

Speaker 2:

Exactly Location is taking on a whole new meaning. It's not just about being close to work or good schools. It's also about understanding how vulnerable a property is to flooding, wildfires or other climate-related risks.

Speaker 1:

And it's not just about protecting your money. It's about keeping yourself and your family safe.

Speaker 2:

Right. Being climate resilient is becoming a crucial part of owning a home responsibly in 2025 and beyond. Another big trend is how work is changing and how that's changing where we live. More people are working remotely or in hybrid models, which means they can live farther away from city centers, and that's why we're seeing people continue to move to the suburbs.

Speaker 1:

So the suburbs are changing. They're not just for families with kids anymore. They're becoming a place for remote workers, entrepreneurs, anyone who wants a more balanced lifestyle.

Speaker 2:

Exactly, and all these new people are changing the suburbs, creating new opportunities and challenges. We're seeing a lot of new construction, but there are also concerns about infrastructure affordability and keeping that special suburban feel.

Speaker 1:

It's interesting how connected everything is and how individual decisions can have big ripple effects.

Speaker 2:

It really is, and it highlights how important it is to think about the long term when making decisions about housing. How will your needs and priorities change over time? Will your home still work for you in five, 10, or even 20 years?

Speaker 1:

Those are big questions. That's what this deep dive is all about giving our listeners the knowledge and information they need to make smart choices.

Speaker 2:

Exactly, and remember there's always more to learn. For those who want to really get into real estate investing, we highly recommend visiting www.2060.us.

Speaker 1:

It's a fantastic resource with insights and expert analysis to help you understand the real estate market and make good investment decisions.

Speaker 2:

That wraps up our look at the 2025 housing market. We've covered a lot, but hopefully you're leaving with a better understanding of the trends, the challenges and the opportunities ahead.

Speaker 1:

It's been a great journey and remember in real estate, knowledge is power. Stay informed, stay curious and, most importantly, make choices that align with your values and goals.

Speaker 2:

Well said and remember. Your home is more than just an investment. It's your safe space, your place to make memories and your foundation for the future.

Speaker 1:

So choose wisely, invest thoughtfully and make it a place where you can truly thrive. Thanks for joining us on the Deep Dive.

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David (Viacheslav) Davidenko

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