Rapid population growth and affordability are fueling some of the hottest markets investors need to keep an eye on in 2025.
Dallas, which saw the largest increase in population in 2023, according to the U.S. Census Bureau, is ripe as an investor’s market.
Four other cities—including Miami; Houston; St. Petersburg-Tampa, FL; and Nashville, TN— ranked high in the Emerging Trends in Real Estate 2025 report from Price Waterhouse Coopers and the Urban Land Institute, which identified the five hot markets buyers and investors should watch in the coming year.
The report looked at various factors, including the current local market, homebuilding and new construction prospects, and overall real estate prospects to determine the hottest markets.
Sun Belt cities made up 13 of the top 20 markets to watch, drawing interest because of their thriving economies and relative affordability.
Other popular areas are what PWC/ULI dubbed “18-hour cities,” such as Denver; Charlotte, NC; and Ft. Lauderdale, FL. These cities haven’t entirely developed into markets with 24/7 amenities and access, but they can compete against larger cities because of their relative affordability.
“Supernova cities,” or cities that have seen vast amounts of growth relative to the overall U.S. population, also ranked high on the “markets to watch” list. Those cities, which include Austin, TX, and Raleigh-Durham, NC, are projected to see 8% in population growth over the next five years, compared with the U.S. population growth average of 1.9%.
Here’s what makes Dallas, Miami, Houston, St. Petersburg-Tampa, and Nashville especially attractive for investors,
1. Dallas, TX
Median home list price: $434,500
Median monthly rent: $1,475
What’s Dallas’ secret weapon? It’s rapid population growth.
“Dallas is one of the best cities for real estate investors in 2025 due to its rapid growth, economic opportunities, business-friendly policies, and appealing lifestyle,” says Harrison Polsky, a real estate agent at Douglas Elliman in Dallas.
Polsky says that’s partly because of the large number of Fortune 500 companies in the area. In 2023, Goldman Sachs broke ground on a $500 million corporate facility that will house over 5,000 employees.
“North Texas’ growing financial presence is second only to New York City,” says Polsky. Plus, the city is known for its relatively affordable housing that might appeal to families who are “priced out of coastal metros.”
2. Miami, FL
Median home list price: $535,000
Median monthly rent: $1,227
Steady demand in the Miami area has driven up rent and property values.
“The steady demand drives up rents and property values and offers investors attractive rental yields around 5% to 7% with potential appreciation near 6% to 8% in sought-after neighborhoods,” says Ron Myers of Ron Buys Florida Homes in Wellington, FL.
However, Myers warns of some of the potential complications investors in the area might face. While Floridians benefit from a lack of income tax, they also face higher-than-average insurance premiums and elevated climate risks.
“Investors focused on properties with elevated construction or in less flood-prone areas may find better long-term returns despite the high insurance costs,” he says.
3. Houston, TX
Median home list price: $369,450
Median monthly rent: $1,375
Nearly 140,000 people moved to Houston between 2022 and 2023—partly because of the city’s thriving health care, tech, and green energy sectors. Businesses there benefit from development-friendly policies, including a lack of formal zoning laws in the city.
Still, Houston remains relatively affordable, with median home list prices and monthly rental prices below the national average.
“Dallas and Houston are seeing lots of economic growth, with job opportunities expanding significantly, largely because of many startups finding these cities to be great places to make home base,” says Seamus Nally, CEO of TurboTenant.
“And when job opportunities grow, so does population,” adds Nally. “Lots of people are moving to these cities for the opportunities, which is great for investors who can get their foot in the door.”
4. Tampa-St. Petersburg, FL
Median home list price: $399,999
Median monthly rent: $1,720
Tampa-St. Petersburg saw a vast population influx during the COVID-19 pandemic. However, that seems to have slowed down, says Robert Washington of Savvy Buyers Realty in St. Petersburg.
“Many of the prospective buyers that I speak with have elected to wait for mortgage rates to come down before making the move,” he says. “I think a lot of that pent-up demand will start to come back into the market once rates start to come back down.”
From an investment standpoint, the job growth prediction alone makes it an attractive market, according to Alee Douglass, a broker associate with Premier Sotheby’s International Realty in Tampa.
“With the forecast at 2.3 times the nation’s five-year forecast, there is going to be a continued demand for housing and a continued influx of people moving to our area,” she says.
Investors thrive in the Tampa-St. Petersburg market because of the warm weather and attractive beaches, which draw seasonal residents.
“While we have had an increase in regulations on short-term rentals, there are certain areas where they are approved, and investors stand to make a substantial ROI,” says Douglass.
The area offers low vacancies and rental yields around 4% to 6%, with projected appreciation at roughly 5% to 6% in growth neighborhoods, adds Myers.
But, just as in Miami, investors should also consider climate and insurance costs.
“Tampa-St. Pete’s steady demand and affordable entry points make it a solid investment, provided investors remain mindful of the region’s climate risks.”
5. Nashville, TN
Median home list price: $542,447
Median monthly rent: $1,578
After three years at the top spot, Nashville dropped to fifth place on the 2025 list. However, it remains one of the fastest-growing markets in the country. The country music hot spot grew by 86 people a day throughout 2023, according to U.S. Census Bureau data.
That growth has led to an increase in housing prices, but the cost of doing business in the area remains slightly lower than the national average, and the corporate tax rate—while higher than Florida or Texas—remains lower than many other major markets, according to the report.
Article source: [www.realtor.com]
