If you think California and New York are leading the real estate markets in 2025, think again. A real estate market change is taking place this year in other regions with affordability, population growth, and really booming local economies. Best promising markers tend to be clustered up within the Southern and Western states, such as Texas, Florida, and Virginia having the spotlights yet again, according to Realtor.com.
What makes these states the top real estate markets of 2025?
The best markets for 2025 are ones with a blend of affordability, growth potential, and livability. They are now drawing young and diverse buyers, many of whom have ties to the military or international communities.
The following are the main market-driving ones:
- Affordability: Such homes are often under the national average in terms of price.
- Good opportunities: These really represent potential destinations for talent because of existing thriving industries and job growth.
- Lifestyle: This is a warm climate along with lively communities.
Read more: One of the worst investment strategies: why you really don’t want to keep your money at home
Which states are leading the real estate boom?
Here is a complete list of states with high real estate potential in 2025, according to Realtor.com:
- Colorado: Colorado Springs
- Florida: Miami, Fort Lauderdale, Pompano Beach, Orlando, and Kissimmee
- Virginia: Virginia Beach, Norfolk, Newport News, and Richmond
- Texas: El Paso and McAllen
- Arizona: Phoenix, Mesa, and Chandler
- Georgia: Atlanta, Sandy Springs, and Alpharetta
- North Carolina: Greensboro and High Point
All the states and areas mentioned above have their own advantages.
How affordable are these markets compared to the national average?
Incomes in these states tend to be lower than national averages. However, they have many places where housing costs are lower. Buyers in these markets spend about 31.1% of their incomes on housing, slightly higher than the national average of 29.2%. This is compensated by a lower overall cost of living.
For example:
- Texas and Florida provide affordable options for first-time buyers.
- Virginia’s real estate markets benefit from strong military ties.
- Arizona and Georgia offer warm weather and growing job markets, making them appealing to young professionals.
Who is driving the demand in these markets?
This demand is from a young and more diverse group of buyers looking for regions with:
- A strong job market to further their career
- Affordable housing that fits into their current budget
- Cultural and recreational amenities conducive to a higher quality of life.
According to Danielle Hale, Realtor.com’s chief economist, “With mortgage rates likely to decline only modestly next year, these markets, which offer relatively lower-priced homes, more new and existing homes to choose from, and mortgage products designed to give buyers an edge, could provide some prospective buyers with a better chance of entering the market next year.”
As 2025 unfolds, the top real estate markets are proving that you do not need to look to California or New York to find great opportunities. With affordability, job growth, and lifestyle appeal, the new states mentioned above are becoming the new go-to destinations for homebuyers. If you are planning to make a move, these markets might be worth a closer look.
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