NAVIGATING REAL ESTATE MARKETS
Navigating real estate markets in 2025 has proven to be more about fundamentals than fads. While everyone is talking about artificial intelligence or timing real estate markets (waiting for prices to fall or renting instead of buying), success comes from understanding real estate consumption, population growth, and relationships.
We can’t not consume real estate. When we go to work, drive a car, go on vacation, go out to eat, attend a sports or entertainment venue, or relax at home, we are consuming real estate. Whether interest rates are high or low, sold units are high sold units are high or low, or prices are up or down, we are consuming real estate. In the long-run, median home prices beat inflation and home prices go up nine out of every 10 years.
SUPPLY AND DEMAND
Home values are determined by supply and demand. If population is increasing in your area, then a new home needs to be built. If the number of homes built is inadequate to meet the growing population, then prices will rise. If too many homes are built, then prices may decline. Prices must be high enough to compensate a builder for adding new housing inventory, or else no new homes will be built. The cost of building a home is the floor for new home values in a market where population is growing.
RELATIONSHIPS MATTER
As people make important decisions, they look for trusted advisors to assist with the decision. The more important the decision, the more likely they will seek advice from relationships a the more weight these recommendations will have. Whether a home is for personal use or as an investment, buyers and sellers are relying on trusted relationship more than ever.
While AI and short-term market fluctuations attract attention, the most significant drivers for real estate remain long standing fundamentals of understanding consumption, population growth, and relationships.
LOOKING FORWARD
In the United States and in the markets we serve, population is growing and demand for real estate is increasing. Contrary to perception, prices are slowly rising, except in markets where construction is outpacing demand. Real estate professionals continue to be a critical part of the decision making process as they help individuals and families successfully navigate today’s real estate markets.
“Real estate professionals continue to be a critical part of the decision making process.”
Neil Walter
CEO of ERA Brokers | Colonial | Donahoe
“Real estate professionals continue to be a critical part of the decision making process.”