Kat Koutsantonis Chief People Officer | realtors.com
Rapid population growth and affordability are key factors driving the hottest housing markets that investors should watch in 2025. Dallas, which experienced the largest population increase in 2023 according to the U.S. Census Bureau, is considered a prime market for investors.
The Emerging Trends in Real Estate 2025 report by Price Waterhouse Coopers and the Urban Land Institute highlights four other cities alongside Dallas: Miami; Houston; St. Petersburg-Tampa, FL; and Nashville, TN. These cities rank high as potential investment opportunities for the coming year.
The report evaluated several factors such as local market conditions, homebuilding prospects, and overall real estate potential to identify these top markets. Sun Belt cities dominated the list with 13 of the top 20 spots due to their strong economies and relative affordability.
Other areas of interest include "18-hour cities" like Denver; Charlotte, NC; and Ft. Lauderdale, FL—cities that have not fully developed into 24/7 urban centers but offer competitive advantages over larger metropolitan areas due to their affordability.
Cities experiencing significant growth compared to national averages, termed "supernova cities," also made it onto the list. Austin, TX, and Raleigh-Durham, NC are expected to see an 8% population increase over five years against a national average of 1.9%.
Dallas stands out due to its rapid population growth. Harrison Polsky from Douglas Elliman in Dallas attributes this to economic opportunities and business-friendly policies that attract families priced out of coastal metros.
In Miami, demand has led to increased rents and property values. Ron Myers from Ron Buys Florida Homes notes rental yields between 5% to 7%, with potential appreciation near 6% to 8%. However, he cautions about high insurance premiums and climate risks affecting long-term returns.
Houston's appeal lies in its thriving health care, tech, and green energy sectors along with development-friendly policies like no formal zoning laws. Seamus Nally of TurboTenant emphasizes job opportunities as a draw for new residents.
Tampa-St. Petersburg experienced a surge during the COVID-19 pandemic but has since slowed down according to Robert Washington from Savvy Buyers Realty. Alee Douglass from Premier Sotheby’s International Realty cites job growth forecasts as making it attractive for investors despite climate considerations.
Nashville remains one of the fastest-growing markets despite dropping on the list after three years at number one. The city saw substantial daily growth throughout 2023 per U.S. Census Bureau data while maintaining competitive business costs below national averages.
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