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- The 2025 real estate forecasts are in!
The 2025 real estate forecasts are in!
Plus, good news on homebuyer demand
Getting out our crystal ball
While we always say we take forecasts with a grain of salt, we have certainly been interested to see what all the major firms project for 2025. Now those projections are rolling in! We give you a brief overview of all the main ones, and give you our takeaways.
We also take a look at Zillow’s report on which markets are likely to see the biggest price growth and drop next year.
And while nobody can 100% predict what’s going to happen, we can try our best to be prepared for anything this business might throw our way. In today’s Foundation Plans, we share three thoughts on how you can best be prepared for the upcoming year… which is now only 40 days away!
So let’s waste no more time and get into today’s Blueprint!
- James and David
Here come the 2025 forecasts
A variety of agencies and firms have published their real estate forecasts for 2025. On average, they project a 2.6% rise in home prices and 4.47 million home sales. Here’s a breakdown of those projections via Housingwire.
Home Prices
| Home Sales
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Our take
With the market on track for just 4 million home sales this year, this marks its slowest pace since the 2008 financial crisis. While these surveys do predict a rise of roughly 5% next year, that is still below historical norms. Over the past two decades, annual home sales have averaged 5.15 million, peaking at 7 million in 2005. The primary challenge in 2024 has been limited inventory, but HousingWire projects a 13% increase in active listings next year, reaching 720,000 by year-end. While forecasts aren’t sure things, they help set realistic expectations. One thing seems clear: a housing crash or downturn isn’t on the horizon for 2025.
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Redfin’s Homebuyer Demand Index hits highest level in 15 months
Source: Unsplash
According to Redfin, the number of people contacting its agents for help buying and/or selling a home rose by +17% year-over-year in mid-November, causing its Homebuyer Demand Index to reach its highest level since August 2023. It also marks the biggest YOY increase since January 2022. Here are other key stats from the four-week period ending on November 17th:
Mortgage-purchase applications went up 2% week-over-week
Pending home sales increased 4.5% YOY
New listings increased 0.4% YOY
The total number of homes for sale went up 11.8% YOY
Our take
The recent surge in buyers and sellers entering the market is clearly fueled by pent-up demand from those waiting for the election to pass and the Fed to implement a second rate cut. As we noted in our last edition, 25% of first-time homebuyers postponed their purchase decisions until after the election. Surprisingly, despite rising mortgage rates, many house hunters are rejoining the market. It’s a reminder that buyer behavior isn’t always predictable. As agents, we sometimes have to catch and ride the wave when opportunities present themselves. It remains an open question whether this is a brief post-election spike or the start of sustained growth. We’ll be monitoring the trend very closely.
Markets with the highest projected price growth and drop
Source: Unsplash
Home prices are expected to rise by +2.95% between October 2024 and October 2025. That’s according to Zillow’s latest housing forecast via ResiClub. As we noted in our first story, Zillow anticipates 4.3 million home sales in 2025, up from 4.1 million in 2023 and the estimated 4 million in 2024.
According to Zillow, among the nation's 400 largest housing markets, these are the top 5 metros with the biggest projected price growth and drop over that period.
Biggest Projected Price Growth | Biggest Projected Price Drop |
Our take
Zillow’s latest projections mark an upward revision from last month's forecast. While home values continue to climb, growth remains modest due to opposing market forces. There are factors supporting price growth: historically low inventory, anticipated declines in mortgage rates, and slight improvements in home sales indicators. However, rising new listings and persistently high mortgage rates are keeping price growth in check. Here’s a marketing tip – create a price growth list focused on your local market and share it with your clients. Get as specific as you can. That’s what potential buyers and sellers want to know.
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Schematics
The news that just missed the cut
Source: Unsplash
The cities around the world with the most billionaires
Post NAR settlement, buyer agent commissions remain unchanged
Home values now rising faster in areas with lower climate risks
The implications of immigration policies on housing
Dwyane Wade & Gabrielle Union’s chic new beach home
Foundation Plans
Advice from James and David to win the day
With only 40 days until the new year, we’d like to offer you three thoughts to help you hit the ground running when 2025 rolls around. It’s coming faster than you think, so start getting ready now.
Make sure you have your KPIs in place – By now you should have your business plan for 2025 in place. Make sure you have your key performance indicators in place. They may vary depending on what you prioritize. For most agents, we recommend tracking the following three KPIs regarding lead generation: an appointment goal, a conversation goal, and an outreach goal. No matter how good your plans are, without tracking how you’re doing, you’ll be flying blind.
Your systems, not your goals, determine your success – “You do not rise to the level of your goals. You fall to the level of your systems.” That’s from James Clear and he’s absolutely right. It’s not enough to have ambitious goals and it’s not enough to even track whether you’re achieving them or not. You need systems in place to help you achieve your goals.
Systems refer to the processes, habits, routines, and consistent actions that we follow regularly to make progress or achieve our goals. While goals provide direction and motivation, it's the systems that truly determine whether we'll achieve those goals. If your systems aren't aligned with your goals, you're likely to fall short, regardless of how great those goals are.
Host a First-Time Homebuyer/Seller Seminar – We’d like to leave you with a lead generation idea we like a lot. Host a first-time homebuyer or seller seminar in your area. Do this in person or online. There are so many ways to connect with people now. The point is to establish yourself as a knowledgeable go-to broker in your market while also increasing your base of influence and circle of contacts.
To empower agents to take charge and excel in 2025, seasoned professionals Tim and Julie Harris have crafted a comprehensive list of actionable steps that agents can start implementing today. Check it out!
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Just in Case
Keep the latest industry data in your back pocket with today’s mortgage rates:
Source: Mortgage News Daily
That’s a wrap on this edition of The Blueprint!
Remember: each day is a gift and a new opportunity to lead the life you want and to become the person you want to be. The mistakes and missteps you’ve made in the past don’t define you. Live as intentionally as you can and be ruthlessly focused on the goals you’ve set out to achieve. You can do it!
Thanks for reading, and we’ll see you back here on Tuesday!
- James and David