For real estate investors, 2024 was a collective holding of breath while waiting for election results, war news, and what Jerome Powell’s blinking at the press conference may indicate for interest rate changes.
With a more stable outlook, here is where the 2025 real estate investing trends seem to point.
The Market
1. Buy Cycle
Collectively, the market has sensed that we are past the low point in this cycle, and buyers have returned to the market to purchase.
Analysis by Hines Research has found that as of Q3 2024, over 66% of global markets were in some phase of the “buy” cycle, the highest level since 2016 and akin to the early years of the post-global finance crisis recovery (see chart below).
- Look for opportunities to purchase where economic drivers will increase rents above average, as these will be key areas for appreciation in a slower-growth market.

2. High Financing Crisis
While rates have kept a lid on acquisition pricing, smart investors have found ways to continue to fund real estate acquisitions, even in the face of tighter lending criteria. Private capital has stepped in to fund the liquidity gap.
- Look for interest rates to soften as the dust begins to settle after the incoming administration sets up shop.
3. Loan Maturity Deadlines
Nearly $1.8 trillion in commercial real estate loans are set to mature before the end of 2026. While lenders have been extending these loans in hopes of better market conditions, this temporary relief is nearing an end, as it appears we are past the low point in the market.
- Look for more deal flow as owners decide to sell when their loan matures, because of recovered pricing.
4. Insurance Costs
Natural disasters caused $380 billion in economic losses in 2023 alone, yet only 31% of those were covered by insurance. Insurance premiums are surging due to extreme weather, inflation, and increased property values. Residential, hospitality, and senior living properties are particularly impacted, with rising claims.
- Look for more focus on right-sizing insurance and scrutiny from insurance companies as new policies and renewals take place.
Trends
1. Deploying Capital
Money has been sitting on the sidelines, and it needs to earn a return. As the market senses we are past the low point, that capital will return to the market. Deal flow will increase, as loans come due and owners make the decision to go to market.
2. Easing New Construction Pressures
The sharp increase in interest rates in 2022/23 caused most new construction to stop if it had not broken ground. The market has now largely absorbed the units that were in process when interest rates increased and, with limited supply in the construction phase, market rents will pick up – bringing deal flow up with it.
- Over the past six quarters, the U.S. multifamily sector has posted stagnant rent growth, with an average annual increase of just 1% after setting a national record high with a 9.8% average annual rent increase at the beginning of 2022.
- After reaching a 40-year high of 692,000 apartment units added in 2024, expected completions of new units in 2025 will likely decline by 50% to the mid-300,000 range. At the same time, demand appears poised to remain above 400,000 units if economic growth remains steady and potential new renters feel confident about signing a lease.
3. Eco-Friendly Real Estate
In 2025, we’ll likely see a surge in demand for eco-friendly real estate driven by rising climate awareness and incentives for sustainable building. Investors prioritizing green properties may see higher ROI as tenants and buyers increasingly refer to energy-efficient spaces. This trend could also lower long-term insurance costs and increase property values.
4. Flood Risks
A key trend will be a new focus on flood risks, driven by recent extreme weather. Investors will increasingly assess proximity to and potential for flooding. As the recent disaster in North Carolina shows, even properties not subject to flooding normally can be severely affected by extreme weather.
5. Mixed-Use Investments
Expect a surge in new mixed-use development in new construction or adaptive reuse projects. These properties cater to shifting lifestyles, offering live-work-play environments while benefitting from affordability and growing populations. Municipalities are encouraging village-style development to increase walkability and promote the conservation of natural resources.
6. Flexible Workspaces
While many large companies have enacted return-to-office policies, there is no denying that smaller companies now see flexible offices as the new normal. Having flexible and beautiful workspaces can be a real game-changer for small- to mid-sized businesses. A pleasant atmosphere with amenities in the building or close by is key to attracting people back to the office, either for a hybrid work environment or full-time.
7. Digital Infrastructure
An increasing trend is more investment in digital infrastructure real estate, such as data centers, server farms, and cell towers. With the rapid growth of cloud services, 5G, and AI, the demand for these facilities is outstripping supply. This makes digital infrastructure properties increasingly valuable for investors.
Taxes
1. Bonus Depreciation
The extension of bonus depreciation back to 100% was passed in the House this past summer but did not make it through the Senate. Indicators point to this being passed in 2025 due to the bipartisan support that was previously shown.
2. Elimination of SALT
The SALT (state and local taxes) deduction limit of $10,000 was part of the TCJA that is currently set to expire at the end of 2025. It is widely believed that this will be lifted, which will benefit those living in states with higher taxes.
3. Section 199A – QBI
One of the most impactful changes for real estate investors is the scheduled expiration of the 20% Qualified Business Income deduction at the end of 2025. This deduction has been a significant tax benefit for many in the real estate industry. Its loss could effectively increase taxable business income by 20% for many investors.
Unlike the corporate tax rate, which was made permanent in TCJA, Section 199A and the lower individual income tax rates expire at the end of 2025. It is anticipated that Congress will extend or make permanent this deduction.
4. Alternative Minimum Tax (AMT)
The alternative minimum tax thresholds are set to revert to pre-TCJA levels after 2025. This parallel tax system ensures that high-income individuals pay a minimum tax, regardless of deductions and credits. With lower thresholds set to be reinstated at the end of 2025, it is expected that the current thresholds will be extended.
Political Climates
While we know the results of the U.S. elections by now, there are elections in more than 70 counties in the coming year – which could shake up an already volatile geopolitical landscape. Wars and the political climate in other countries will still affect the landscape of our economy, as the supply chain and price of oil have already been affected.
1. Tariffs
While it remains to be seen what level of tariffs will be enacted under the incoming Trump administration, the effects on the overall economy will be felt in the pricing of goods.
2. Oil
Pricing on oil is headed down, which has a deflationary effect on the economy and may balance out any inflationary pressures brought about by tariffs.
The U.S. Energy Information Administration expects crude oil production to increase in 2025 and 2026, both globally and in the United States. EIA estimates that U.S. crude oil production averaged a record 13.2 million barrels per day in 2024 and expects it to grow to an average of 13.5 million barrels per day in 2025.
Conclusion
2025 is looking to be the year of steady growth and stability as the real estate market comes back into balance because of the key features discussed above. Smart investors will stay tuned in as these events take shape, which will enable them to maximize their returns.
If you are looking to grow your investments in 2025 in Pennsylvania and Maryland, contact us for a consultation on the best forward-facing strategy.
Videos
Want to learn more about some of the topics mentioned above? Check out these videos:
Sources
https://www.nar.realtor/magazine/real-estate-news/top-10-issues-that-will-impact-real-estate-in-2025
https://www.multifamilydive.com/news/2025-apartment-transaction-trends-sales-new-development/736588/#:~:text=In%20its%202025%20U.S.%20Real,real%20estate%20investors%20in%202025.%E2%80%9D
https://product.costar.com/home/news/263299466
https://www.msci.com/www/blog-posts/real-estate-in-focus-2025/05250339676
https://www.weforum.org/stories/2025/01/2025-pivotal-year-market-recovery-commercial-real-estate/