Between the ongoing shortage in housing inventory and the expected mortgage rate decreases, 2025 looks to be a good year for modest growth. Of course, some markets are showing more promise than others. So, which are the hottest real estate markets to watch in 2025?
A new Realtor.com forecast indicates major growth potential in affordable mid-size metros, particularly those with a strong military presence. Markets with military bases regularly attract new buyers to the region as active-duty personnel receive new orders and military contractors hire new employees. Military residents are well-positioned as buyers thanks to livable wages and VA loans (mortgages with favorable terms backed by the Department of Veteran Affairs). Furthermore, these markets often have high turnover as established service members are given new orders to relocate out of the area, freeing up inventory for new buyers and increasing the number of real estate transactions for the area.
This is a dramatic shake-up from 2024, in which five of the top 10 markets to watch were located in Southern California. Most of SoCal delivered in 2024, seeing comparatively strong growth in both prices and volume given the challenges of low inventory and higher interest rates than most buyers were used to. However, these 2024 gains leave less room for growth in CA in 2025. (Skip ahead to the California Real Estate Outlook section of this article to learn more about what to expect in CA this year.)
So, which areas are poised for serious growth this year? Here are the top real estate markets to watch in 2025…
Top 5 Real Estate Markets to Watch in 2025
1. Colorado Springs, CO
Colorado Springs has been a comparatively hot market for over a decade. Located just 70 miles south of Denver, “The Springs” has attracted homebuyers and investors who were priced out of the expensive Denver market but wanted to remain within commuting distance.
Home to Fort Carson, Peterson Air Force Base, Schriever Air Force Base, and the prestigious United States Air Force Academy, the strong military presence in CO Springs means a revolving door of military service members and families buying and selling homes. In fact, nearly 30% of home sales in Colorado Springs in the first quarter of 2023 were funded by military VA loans.
The comparatively stable demand, bolstered by the military community and Denver overflow, has driven prices up year after year.
With a median home value estimate of $450,000 and a median sales price of $464,000, Colorado Springs home prices are just about the national average of $430,000.
Median Home Value (as of November 2024): $450,829
Forecasted change in sales price for 2025: 12.7%
Forecasted change in the number of home sales for 2025: 27.1%
2. Miami-Fort Lauderdale-West Palm Beach, FL
The Miami-Fort Lauderdale-West Palm Beach metro, located in South Florida, draws both domestic and international buyers with its mix of luxury waterfront properties, high-rise condos, and suburban single-family homes.
As a global hub for finance, tourism, and trade, Miami’s strong economy fuels steady demand for housing. Additionally, the area has long been a favorite among retirees, remote workers, and international buyers, particularly from Latin America and Europe. Fort Lauderdale and West Palm Beach provide more affordable alternatives to Miami, attracting those looking for larger homes or quieter communities while still being close to the city’s economic and cultural opportunities.
With a median home value estimate of $486,000, this area is the most expensive of the real estate markets to watch in 2025. But for the many buyers looking for warm weather year-round and lots of outdoor recreational opportunities, this area is worth the price tag.
Median Home Value (as of November 2024): $486,056
Forecasted change in sales price for 2025: 9.0%
Forecasted change in the number of home sales for 2025: 24.0%
3. Virginia Beach-Norfolk-Newport News, VA/NC
The Virginia Beach-Norfolk-Newport News metro area, commonly known as Hampton Roads, has long been a steady real estate market thanks to its strong military presence and coastal lifestyle. Located in southeastern Virginia and northeastern North Carolina, the region is home to Naval Station Norfolk, the world’s largest naval base, along with Joint Base Langley-Eustis, Naval Air Station Oceana, and several other military installations.
Beyond the military, Hampton Roads attracts families and professionals drawn to its affordable cost of living, waterfront access, and proximity to major employers in defense, shipping, and tourism. Virginia Beach offers a more suburban, beachfront appeal, while Norfolk and Newport News provide a mix of urban and historic charm.
While home values have risen steadily over the past decade, the area remains relatively affordable compared to other East Coast metros. The median home value estimate of $349,000 makes this market more affordable than most.
Median Home Value (as of November 2024): $349,186
Forecasted change in sales price for 2025: 6.6%
Forecasted change in the number of home sales for 2025: 23.4%
4. El Paso, TX
Located along the US/Mexico border, near the New Mexico state line, El Paso remains a highly affordable metro area, appealing to budget-conscious buyers.
Fort Bliss, one of the largest military bases in the US, plays a crucial role in the local housing market, bringing a steady flow of active-duty personnel, veterans, and military families. Cross-border trade and healthcare create additional employment opportunities.
With a median home value estimate of $224,000 and a median sales price of $255,000, El Paso remains significantly more affordable than the average US market. For those with lower budgets (or investors looking to spread investment capital across multiple properties), El Paso real estate represents a good value.
Median List Price (as of November 2023): $223,587
Forecasted change in sales price for 2024: 8.4%
Forecasted change in the number of home sales for 2024: 19.3%
5. Richmond, VA
The state capitol, Richmond, Virginia, blends historic charm with a thriving economy and a strong military presence. The city benefits from a diverse job market driven by government, finance, healthcare, and education. The city is also home to Fort Gregg-Adams (formerly Fort Lee), which supports a steady demand for housing from military personnel and their families.
The city’s mix of historic neighborhoods, modern developments, and suburban communities appeals to a wide range of buyers, from first-time homeowners to retirees. Popular areas like The Fan, Church Hill, and Short Pump continue to draw interest for their walkability, amenities, and strong property values.
Richmond’s affordability compared to larger East Coast cities like Washington, DC and Charlotte, NC makes it an attractive option for those seeking a lower cost of living without sacrificing urban conveniences. While home prices have risen, they remain competitive within the region.
With a median home value estimate of $353,000, Richmond’s housing market remains affordable, despite recent property value increases.
Median List Price (as of November 2023): $352,749
Forecasted change in sales price for 2024: 6.1%
Forecasted change in the number of home sales for 2024: 21.6%
California Real Estate Outlook 2025
As a California-based real estate syndication company, Gatsby Investment knows our investors are highly interested in California markets. So where do the CA markets rank on the new Realtor.com list of markets to watch in 2025? And why aren’t they higher?
Riverside-San Bernardino-Ontario ranks highest at the number 25 spot on the list with projected price increases of 8.8% and volume growth of 11.4%.
Oxnard-Thousand Oaks-Ventura comes in at number 48 with projected price increases of 8.0% and volume growth of 8.2%.
This is followed immediately by Stockton-Lodi at number 49 and Bakersfield at number 50.
The main reason these CA markets aren’t ranked higher is that they are already high-value. The average home value in Ventura County, for example, is $872,000. This puts CA housing markets out of reach for many national buyers. However, this also means high return potential. The projected price growth of 8% for the Oxnard-Thousand Oaks-Ventura region would put these values at $941,760 by 2026. That’s a dollar-value increase of $70,000!
Los Angeles Real Estate Outlook 2025
Since Gatsby holds such a strong niche in Los Angeles, we also want to provide a more local real estate outlook for the coming year.
Realtor.com puts the Los Angeles-Long Beach-Anaheim metro at number 76 of US real estate markets to watch in 2025. Price growth is projected at 5.5% with volume of sales expected to grow by 4.2%.
These moderate gains mean property values are continuing to grow at a sustainable rate.
This well-paced growth works well for certain investment types, including:
Long-term rentals. Not only are rental properties appreciating at reasonable rates, but rents are also increasing, creating more incentive for investors to buy rental properties for long-term tenants.
Multi-family developments. Building from the ground up creates more value and increases return potential. Small multi-family developments are in high demand by investor buyers, allowing for quick sales of the new development.
Affordable housing developments. Affordable housing is always in high demand, but especially in high-value markets. Section 8 housing programs and tenants-in-common (TIC) developments can provide strong returns for savvy investors.
But how do investors afford to start investing in such a high-value market? Gatsby can help!
Invest with Gatsby Investment in 2025
Gatsby empowers investors to access real estate deals that are typically out-of-reach to individual investors. We do this by pooling funds from multiple investors to finance a complex real estate project (like a multi-family development, for example). This system allows you to buy into a multi-million-dollar deal for as little as $25,000. The best part? We professionally handle every detail of the project for you. You don’t have to scout properties, create ownership LLCs, or supervise contractors. We take care of everything for you!
Don’t let the high property prices in Los Angeles keep you out of this lucrative market. With Gatsby Investment you can access high-value deals without the hassle of traditional real estate investing! Explore our real estate investment opportunities and choose your 2025 projects today!
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