With the start of the new year, now seems like the perfect time to review the real estate lessons learned in 2024 so that we can start 2025 out with a blueprint in mind. In 2024, house prices rose by 4.3%, mortgage rates hovered around 6% in the last quarter of the year, and low inventory levels remained a central market issue, leading some experts to assert that the 2024 market was one of the slowest in decades.
However, there are changes on the horizon in 2025, and some parties will reap the benefits. For starters, an estimated 1.1 million new homes are slated to be built in the next 12 months, giving buyers more options. Mortgage rates are projected to level or even drop, which could impact the cost of homeownership and bring buyers back into the market who were otherwise pushed out in previous years.
Things are projected to change in the commercial space as well, with an expected growth rate of over 7.5%.
Taking these factors into account, alongside lessons learned throughout 2024, below are some insights into practical best practices it may be worth applying to operations as you plan out your strategy for the next 12 months.
Buyers Will Prioritize Resilience and Security
Purchasing a home has always been one of the most significant investments an individual can make, but with rising prices, stagnating inventory and the growing concerns regarding harsh weather, buyers are becoming more wary about the resilience of rashly-built homes.
A recent National Association of REALTORS® study found that over half of the clients that REALTORS® worked with were very interested in or at least somewhat interested in sustainable features. That’s likely to increase or stay the same in 2025 as buyers look toward the future resilience of their homes.
This mindset may also extend to more traditional property security measures, leaving buyers prioritizing properties with existing protections like neighborhood security cameras and other smart security measures. The lesson learned? Resilience and security are key selling points.
Commercial Real Estate Shouldn’t Be Overlooked
In the post-pandemic years, commercial real estate has taken quite a hit, with figures from 2023 showing almost every commercial real estate market segment experienced a rise in vacancy rates and deceleration in rent growth contributing to significant losses for investors.
The widespread adoption of remote work schedules and the associated lack of demand for office space, alongside rising interest rates, caused many investors to lose faith in the market in recent years. However, these trends are likely to change course in the near future.
With Return-to-Office (RTO) mandates, increasing real estate investment volumes and rising occupancy rates in the multi-family sector shaping the outlook of commercial real estate in a positive manner, it’s looking like an increasingly smart move to refocus on this area in 2025.
Sustainability Will Continue to Dominate Trends
Demand for sustainable and energy-efficient properties will likely continue to grow in the new year as more homebuyers look to safely navigate rising energy prices and inflation. While eco-conscious infrastructure may have been viewed as a luxury request in previous years, the ability for homeowners to reliably reduce outgoings may see this opinion start to change.
Properties with energy-efficient features such as solar panels, modern insulation, tankless water heaters and greywater recycling systems will be seen as smart investments for those on the property ladder, with smart home technologies also viewed as desirable amenities.
For sellers and agents, investing in these features prior to a sale and making a point to draw attention to existing sustainable infrastructure could be enough to turn hesitant parties into committed buyers. The takeaway? Make eco-friendly features the nucleus of negotiations.
Final Word
The real estate market saw quite a few challenges in 2024, some of which are expected to continue impacting operations in the new year. However, by reviewing the lessons learned in the last 12 months, agents, sellers and buyers can better-position themselves for the future.
As we enter 2025, there are some positive signs to pay attention to. From an expected rise in the number of properties being built, through a potential slowing of mortgage rates and a rise in commercial real estate demand, opportunities for growth are coming. These insights, along with the lessons shared above, should help relevant parties make smart moves in 2025.