Forecast Ranks Houston as No. 3 in US

HOUSTON – (Realty News Report) – Houston ranks No. 3 in the nation among the most promising markets to watch in the PwC and the Urban Land Institute (ULI) Americas newly released Emerging Trends in Real Estate 2025.

Emerging Trends is an annual forecast report based on data and insights gathered from some 2,000 leaders in commercial real estate development, finance and brokerage, along with fund managers, lenders and advisors.

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

Dallas-Fort Worth
Miami
Houston
Tampa – St. Petersburg
Nashville
Orlando
Atlanta
Boston
Salt Lake City
Phoenix

The report noted the Houston strength in energy and the energy transition and the robust Port of Houston, and the health care sector. Houston will be one of the nation’s top cities for home building in 2025, the ULI report forecasts.

“Looking ahead, the (Houston) metro area’s existing energy infrastructure and dominant port system position it to be a leader in the nation’s transition to green energy. Additionally, its unique lack of formal zoning laws makes for a particularly development-friendly environment,” the report said.

Houston’s ranking as the No. 3 most promising market is an improvement over last year’s ranking as No. 11 in the nation.

Houston has seen its ups and downs in the Emerging Trends rankings over the years.

In 2015, Houston ranked No. 1 in the ULI rankings as the emergence of hydraulic fracturing awakened domestic oil fields and oil prices were high. But facing heavy competition and increased production from OPEC nations oil prices fell, delivering a blow to the Houston economy.

Houston’s Emerging Trends ranking dropped to No. 30 the following year (2016) because of the sharp drop in oil prices. By 2018, Houston had drifted down to No. 60.

The 2025 Emerging Trends did not mention that Houston, known as “Space City,” is the location of NASA’s Johnson Space Center. .NASA is proceeding with its Artemis space program, which is expected to transport NASA astronauts to a lunar landing in about three years.

Carpenters & Tradespeople Note: The Emerging Trends report also ranked the markets with the best Home Building Prospects.

Tampa St. Petersburg
Fort Lauderdale
Inland Empire, Calif.
Dallas/Fort Worth
Atlanta
Phoenix
Houston
Boston
Minneapolis
Seattle

The PwC and ULI Emerging Trends in Real Estate 2025 highlighted next year’s trends thusly:

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.

Multifamily 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.

Higher insurance costs due to growing climate change risks are affecting commercial real estate and housing markets. Climate change is intensifying beyond extreme heat to include risks such as flooding, cold snaps and wildfires. Nearly half of homes nationwide are at risk from at least one type of severe climate event, making insurance harder to obtain.

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. 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.

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