Today, PwC and the Urban Land Institute (ULI) Americas released Emerging Trends in Real Estate® 2025, the real estate industry’s leading annual report. Now in its 46th edition, the forecasting report outlines new market dynamics, favored locations and property sector opportunities influencing the overall health of the industry. Featuring exclusive data and insights gathered from over 2,000 top real estate specialists, the report covers a broad range of real estate topics impacting the U.S. and Canadian markets, from climate change to AI.

“In 2025, we expect lower interest rates will reduce borrowing costs, aid in price discovery, and ultimately encourage an uptick in CRE transactions,” said Angela Cain, ULI Global CEO. “Sentiment is improving, although largely still erring on the side of caution, but we’re glad to see the early signs of capital markets poised for recovery, as firms look to longer-term strong fundamentals and adjust their strategy by market and property type. In this respect, a number of alternative sub-sectors are increasingly of more interest, although the need for housing and logistics continue to make these core sectors attractive.”

While challenges persist across the real estate sector, there are signs of improvement after years of hardship,” said Andrew Alperstein, a partner with PwC’s US real estate practice. “Industry optimism has grown in the last year, though there is an understanding that recovery will be gradual. Looking ahead to 2025, firms should focus on managing short-term risks and adjust their growth strategies to succeed in this reawakening.”

Emerging Trends in Real Estate ® 2025 Top Markets

Each year, Emerging Trends in Real Estate ® lists the top 10 markets to watch. These markets reflect one of the most prevalent trends in this year’s report:

2025 Top Markets:

1. Dallas-Fort Worth

2. Miami

3. Houston

4. Tampa – St. Petersburg

5. Nashville

6. Orlando

7. Atlanta

8. Boston

9. Salt Lake City

10. Phoenix

Emerging Trends in Real Estate Report’s Notable Trends: 

Industry leaders are more confident than a year ago but remain cautious. Stability has returned to property markets, and investors are now addressing cyclical issues like oversupply and adapting to changing consumer and tenant preferences. One exception is the rise in demand for data centers which is soaring due to the widespread growth of artificial intelligence, while other niche property types are also seeing strong growth.

Build-to-rent may see supply glut in high-growth areas. The multifamily market in 2025 will be shaped by the issue of supply, with a wave of apartment deliveries peaking in 2024 and concerns about a supply glut in high-growth Sunbelt markets. However, industry specialists anticipate that demand will remain strong due to job growth, favorable demographics and immigration. Rent growth has slowed in high-supply markets but remains positive in regions with limited new construction. An increasing number of renters are cost-burdened, underscoring the need for more market-rate and affordable housing through new policies and streamlined development.

Higher insurance costs due to growing climate change risks are affecting CRE and housing markets. Climate change is intensifying beyond extreme heat to include risks such as flooding, cold snaps and wildfires, among others. Climate risks are increasingly influencing homebuyers, investors, lenders, and others’ decisions alongside affordability and quality of life. Nearly half of homes nationwide are at risk from at least one type of severe climate event, making insurance harder to obtain. In response, real estate firms are incorporating climate risk into their decision-making and risk assessments.

Data centers dominate the real estate market. Fueled by surging demand from cloud storage, mobile data traffic, AI, and emerging technologies, data centers are seeing a continued increase in interest from tenants and investors. This demand is driving rapid growth, particularly as AI significantly increases the need for computing capacity. However, new supply faces constraints, creating a persistent mismatch between demand and available space. As a result, major data center markets have virtually no vacant space, leading to rising rents and substantial profits for developers able to secure reliable power sources. The supply-demand imbalance is expected to continue for at least the next five years, positioning data centers as a critical asset class in real estate.

For more information about the report or to speak with someone at PwC or ULI about this year’s findings, contact kennedy.byrne@pwc.com (PwC) or ella.fertitta@uli.org (ULI).

PwC 

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with over 320,000 people who are committed to delivering quality in assurance, advisory, and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Content on this page has been prepared for general information only and is not intended to be relied upon as accounting, tax or professional advice. Please reach out to your advisors for specific advice.

About the Urban Land Institute 

The Urban Land Institute is a non-profit education and research institute supported by its members. Its mission is to shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the institute has more than 48,000 members worldwide representing all aspects of land use and development disciplines. For more information on ULI, please visit uli.org, or follow us on Twitter, Facebook, LinkedIn, and Instagram.

Emerging Trends in Real Estate ® 2025 Top Markets

Each year, Emerging Trends in Real Estate ® lists the top 10 markets to watch. These markets reflect one of the most prevalent trends in this year’s report:

2025 Top Markets:

1. Dallas-Fort Worth

2. Miami

3. Houston

4. Tampa – St. Petersburg

5. Nashville

6. Orlando

7. Atlanta

8. Boston

9. Salt Lake City

10. Phoenix

Emerging Trends in Real Estate Report’s Notable Trends: 

Industry leaders are more confident than a year ago but remain cautious. Stability has returned to property markets, and investors are now addressing cyclical issues like oversupply and adapting to changing consumer and tenant preferences. One exception is the rise in demand for data centers which is soaring due to the widespread growth of artificial intelligence, while other niche property types are also seeing strong growth.

Build-to-rent may see supply glut in high-growth areas. The multifamily market in 2025 will be shaped by the issue of supply, with a wave of apartment deliveries peaking in 2024 and concerns about a supply glut in high-growth Sunbelt markets. However, industry specialists anticipate that demand will remain strong due to job growth, favorable demographics and immigration. Rent growth has slowed in high-supply markets but remains positive in regions with limited new construction. An increasing number of renters are cost-burdened, underscoring the need for more market-rate and affordable housing through new policies and streamlined development.

Higher insurance costs due to growing climate change risks are affecting CRE and housing markets. Climate change is intensifying beyond extreme heat to include risks such as flooding, cold snaps and wildfires, among others. Climate risks are increasingly influencing homebuyers, investors, lenders, and others’ decisions alongside affordability and quality of life. Nearly half of homes nationwide are at risk from at least one type of severe climate event, making insurance harder to obtain. In response, real estate firms are incorporating climate risk into their decision-making and risk assessments.

Data centers dominate the real estate market. Fueled by surging demand from cloud storage, mobile data traffic, AI, and emerging technologies, data centers are seeing a continued increase in interest from tenants and investors. This demand is driving rapid growth, particularly as AI significantly increases the need for computing capacity. However, new supply faces constraints, creating a persistent mismatch between demand and available space. As a result, major data center markets have virtually no vacant space, leading to rising rents and substantial profits for developers able to secure reliable power sources. The supply-demand imbalance is expected to continue for at least the next five years, positioning data centers as a critical asset class in real estate.

For more information about the report or to speak with someone at PwC or ULI about this year’s findings, contact kennedy.byrne@pwc.com (PwC) or ella.fertitta@uli.org (ULI).

About PwC 

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with over 320,000 people who are committed to delivering quality in assurance, advisory, and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Content on this page has been prepared for general information only and is not intended to be relied upon as accounting, tax or professional advice. Please reach out to your advisors for specific advice.

Image Courtesy of: Urban Land Institute

About the Urban Land Institute 

The Urban Land Institute is a non-profit education and research institute supported by its members. Its mission is to shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the institute has more than 48,000 members worldwide representing all aspects of land use and development disciplines. For more information on ULI, please visit uli.org, or follow us on Twitter, Facebook, LinkedIn, and Instagram.