Real Estate Experts Say the Market Will Change Dramatically This Year
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It seems that 2025 has already been...well, a lot. And if you're thinking about buying property this year, the plot only thickens: Many states are enacting new real estate laws that will likely play a major role in how dwellers approach buying, selling, and even renting. While the news of changes isn't exactly shocking, as President Donald Trump planned to eliminate "unnecessary" regulations shortly after winning the 2024 election, you'll want to know how they affect you.
"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."
However, Ryan says that the current state of the real estate market didn't just start 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.
With both housing shortages and the homeless crisis being incredibly prevalent problems across the country, simply seeing more affordable properties on the market will be a welcomed change for many. In California, there have been sweeping changes to Senate Bill 9, a law that enables affordable housing by permitting duplexes and lot splits on single-family residential lots. While the bill could once be restricted by vague terms and standards, an amendment clarifies that Senate Bill 9 projects can only be denied if they pose a public health or safety threat to tenants.
Meanwhile, on the East Coast, amendments made to the City of Yes for Housing Opportunity initiative in New York City will make it easier to turn commercial buildings into residential spaces.
Homeowners should also expect to see the rise of accessory dwelling units, or ADUs. Not only have states like Arizona and Nebraska established new regulations that allow ADUs on residential lots, but lawmakers in Texas are also trying to overturn ordinances that have limited or prohibited the use of ADUs. Between the rise of multifamily properties and ADUs, it may become easier to find more affordable options.
Of course, buyers aren't the only ones who can benefit from the new real estate rules. According to Ryan, regulations like the Fair Chance Housing Act in New York City will make 2025 a solid year to rent, too.
"With this new act, landlords are limited in their ability to consider an applicant's criminal history, and they are only allowed to conduct a criminal background check after an offer of housing has been made," she explains.
Not only can this new ordinance make it possible for landlords to cultivate a dynamic, diverse neighborhood, but it may also affect real estate investors who rent out their properties. "They will need to comply with these new regulations which may impact their decision to rent or influence how they manage rental properties overall," Ryan adds
Another win for renters? Thanks to the FARE Act in New York City, landlords will not be able to pass brokerage fees onto potential tenants.
Though mansion taxes have already rocked Los Angeles, this pricey phenomenon seems to be making its way across the United States. Reports claim that as of early January 2025, many other states like New York, New Jersey, Maryland, Connecticut, Hawaii, Illinois's Evanston enclave, and the District of Columbia will also have mansion taxes.
Need a refresher on mansion taxes? In Los Angeles, an additional four percent tax will be imposed on properties that are purchased for $5 million or more. While the exact percentage will certainly vary from state to state—or city to city—one thing's for sure: Those fancier digs will come at a price.
Ryan shares that there's currently a lot of industry buzz regarding whether the new administration will keep interest rates low. "It could continue to stimulate the housing market by making mortgages more affordable," she said. "Regardless of where interest rates are—whether they're upgrading or downgrading—it is more normalized for people to move whenever, even if they have to pay more per month."
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