Real Estate Trends: 2025 Housing and Market Outlook

As tax assessments roll out across major U.S. cities, they’re painting a clearer picture of the post-pandemic landscape for commercial real estate values—particularly office properties. 

However, a lack of transactions continues to obscure the true market value of these assets.

Office Values in Decline

In Philadelphia, newly released property assessments reveal a 6% decline in the taxable value of office buildings, equating to a $635 million reduction. This figure is expected to drop further as appeals are processed. While assessments provide insight, they often fall short of reflecting actual market values, especially in a period of limited transactions—a trend seen not only in Philadelphia but nationwide.

2025 Housing Market: What to Expect

Affordability challenges will persist in the housing market next year, but there are signs of potential relief. A notable uptick in inventory may ease pressure for prospective buyers, particularly as new construction bolsters supply.

Inventory Improvements

Many homeowners locked into low mortgage rates—often under 4%—are increasingly considering moves due to life changes and an acceptance that ultra-low rates won’t return soon. 

Coupled with new construction, this is gradually increasing inventory levels.

New single-family home inventory in October 2024 rose by 8.8% year-over-year, equating to a 9.5-month supply at the current building pace, according to the National Association of Home Builders. This far exceeds the 5–6 months typically associated with a balanced market.

Danielle Hale, Chief Economist at Realtor.com, highlights inventory as a “brightest spot for consumers” in 2025. However, volatile mortgage rates and steady home-price growth are expected to continue constraining affordability.

Compass Acquires Christie’s International Real Estate

Compass Inc., a leading residential real estate firm based in New York, announced a $444 million deal to acquire Christie’s International Real Estate and its @properties brand. The acquisition consists of $150 million in cash and $294 million in Compass common stock, with the transaction expected to close in 2025, pending regulatory approval (source: Phoenix Business Journal). 

Market Impact

Christie’s International Real Estate boasts a network of over 100 domestic and international affiliates, while @properties ranks as the eighth-largest residential brokerage in the U.S. by sales volume. The acquisition will impact local markets differently. For instance, Ansley Real Estate Christie’s International in Atlanta sold approximately 2,600 homes in 2023, generating $2.1 billion in sales volume.

Insurance Strategies in Florida’s High-Risk Market

In Florida, where storms like hurricanes Helene and Milton in 2024 caused widespread damage, homeowners are rethinking their insurance strategies. High-net-worth individuals, in particular, are exploring self-insurance—or “going naked”—for their properties, opting to forgo traditional insurance coverage while maintaining liability insurance.

Expert Perspective

Trevor Baldwin, CEO of The Baldwin Group, emphasizes that self-insurance is only viable for those without mortgages and with the financial stability to absorb potential losses. “For most Americans, insurance is a necessity,” Baldwin notes. “But for those who can withstand the volatility, self-insurance can make sense.”

As markets continue to evolve, understanding the interplay between economic trends, policy changes, and real estate dynamics is crucial for making informed decisions. From shifting housing inventories to innovative strategies in insurance and investment, adaptability will be key in 2025.

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