Real Estate Experts Predict Significant Changes in the Market for This Year

2025 is shaping up to be a year of substantial shifts in the real estate landscape. For those considering purchasing property in the near future, it’s essential to stay informed as various states are implementing new laws that will impact how individuals approach buying, selling, and renting. While these developments were somewhat expected, especially considering President Donald Trump’s previous plans to streamline regulations post-election, it’s crucial to understand the implications for you.

Air of Uncertainty

“A new administration always has an impact on the confidence or lack thereof that people have in the real estate market and their timing of when you buy or sell,” says McKenzie Ryan, real estate agent and founder of her eponymous team at Douglas Elliman. “Right now, there is naturally an air of uncertainty as we wait to understand what Trump’s priorities are that may impact real estate before making any big moves.”

The Real Estate Market Outlook:

However, Ryan notes that the current state of the real estate market did not just begin with the new year or the new administration. “It has been a long journey of uncertainty since 2020,” she reasoned. So what changes can we expect for the rest of 2025? Read on to learn more about the real estate trends that we’re already seeing surging across the country.

A Rise in Dwellings and ADUs

Dealing with housing shortages and the homeless crisis is a significant challenge nationwide. The introduction of more affordable housing options in the market will be a positive development for many individuals. In California, there have been significant modifications to Senate Bill 9, which now allows the construction of duplexes and lot divisions on single-family residential plots to promote affordable housing. An important amendment specifies that projects under Senate Bill 9 can only be rejected if they pose a risk to public health or safety.

On the other hand, modifications to the City of Yes for Housing Opportunity initiative in New York City on the East Coast will facilitate the conversion of commercial properties into residential units.

Accessory Dwelling Units on the Rise

Homeowners can expect to witness the increasing popularity of accessory dwelling units (ADUs). States like Arizona and Nebraska have implemented new regulations permitting ADUs on residential lots. Additionally, lawmakers in Texas are making efforts to reverse restrictions that have hindered the use of ADUs. With the emergence of multifamily properties and ADUs, the prospects of finding more budget-friendly housing options may improve.

Renter’s Rights Refinement

Buyers are not the only ones benefiting from the recent real estate regulations. The Fair Chance Housing Act in New York City, as mentioned by Ryan, is set to make 2025 a promising year for renters as well.

Under this new act, landlords are restricted in considering an applicant’s criminal history, allowing them to conduct a criminal background check only after extending a housing offer, as explained by Ryan.

This ordinance not only enables landlords to foster a vibrant and diverse community but also impacts real estate investors renting out their properties. Ryan notes that they will need to adhere to these regulations, influencing their rental decisions and property management practices.

Another advantage for renters comes from the FARE Act in New York City, preventing landlords from transferring brokerage fees to potential tenants.

Mansion Taxes Spreading Nationwide

Despite initially impacting Los Angeles, the trend of mansion taxes is expanding throughout the United States. According to recent reports, by early January 2025, states such as New York, New Jersey, Maryland, Connecticut, Hawaii, Illinois’s Evanston enclave, and the District of Columbia are set to implement mansion taxes.

For those unfamiliar with mansion taxes, in Los Angeles, a four percent tax is levied on properties sold for $5 million or more. While the exact percentage may vary depending on the location, one thing remains certain: Luxury homeowners will face increased costs for their extravagant properties.

More Affordable Mortgages (Possibly)

Ryan notes that there is currently much discussion in the industry about whether the new administration will maintain low-interest rates. This could potentially boost the housing market by making mortgages more accessible,” she explained. “Regardless of the direction of interest rates, it has become more standard for people to relocate, even if it means higher monthly payments.”