Adding nuance to our weekly Teams Beat newsletter, January is Teams Month at Inman. Find out if you should join a team, what it takes to build one from scratch, and when to consider leaving. Plus, the coveted Inman Power Player Awards as well as the second class of New York Power Brokers and MLS Innovators awards.
As 2025 approaches, many are wondering what the next year will hold for the real estate market, especially the high-performing luxury space. Here are my five predictions for real estate investors, agents and team leads about the luxury landscape and the overall real estate market in 2025.
Pro-development and streamlined zoning policies for residential projects
We expect a continued push to reduce regulations on residential development, making it easier to build new housing. This could include streamlined zoning laws and tax incentives for developers focused on residential projects, particularly in suburban and urban areas facing housing shortages.
Easier permitting processes and reduced red tape would incentivize new housing developments, boosting the availability of single-family homes and multi-family residential units.
The boom in suburban housing demand
In 2025, we will have an emphasis on lower taxes, meaning pro-business policies could lead to an increase in homeownership incentives. Expect a surge in demand for suburban housing as buyers look for more affordable living options outside crowded urban centers.
With favorable tax policies, potential reductions in capital gains taxes and a focus on growing the middle class, single-family homes in suburban markets could see significant price appreciation, fueled by factors like remote work, low interest rates and affordability.
Tax benefits for residential real estate investors
With the return of tax policies similar to the 2017 Tax Cuts and Jobs Act, expect an influx of private equity and institutional investors into the residential real estate market. Investors may be drawn to multi-family properties, single-family rental homes and new residential developments.
Tax incentives that favor depreciation and lower capital gains taxes could drive up demand for rental properties, making it easier for investors to capitalize on high returns from residential units.
Increased focus on affordable housing development
We believe 2025 will bring economic opportunities for Americans and could lead to more emphasis on affordable housing initiatives. Developers may be incentivized to build affordable single-family homes and apartment complexes, particularly in areas with strong job growth.
With federal tax incentives and policies aimed at increasing homeownership, a new wave of affordable residential projects could meet the needs of growing populations in suburban areas and smaller cities.
Infrastructure investments to drive residential growth
A renewed focus on U.S. infrastructure could improve transportation, utilities and other amenities in residential areas. This could make previously underdeveloped or less-accessible areas more attractive for new housing developments.
As infrastructure projects revitalize these areas, expect rising property values and increased demand for homes in newly developed suburban neighborhoods or areas receiving infrastructure upgrades. These investments would make homeownership more appealing in regions poised for long-term growth, further boosting the residential real estate market.
Beau Blankenship is owner and team lead at Blankenship Group, Engel & Völkers 30A Beaches. Connect with him on Instagram.
