As we step into 2025, the real estate landscape continues to evolve under the influence of new taxes, policies, and economic pressures. Below are five key trends that are taking shape as we head into the New Year. These developments have wide-reaching implications for tenants, landlords, and investors alike.
Mortgage Rates and Financing Costs
Mortgage rates have ticked up to just above 7%, adding pressure on both residential and commercial buyers. Higher rates are cooling transaction volumes, particularly in highly leveraged deals. Buyers should plan for increased costs in financing and negotiate accordingly.
SALT Deduction Changes in 2025
The Trump administration is discussing plans to expand the state and local tax (SALT) deduction cap, with some congressional Republicans pushing for a dramatic increase—potentially raising the limit to $100,000 for singles and $200,000 for married couples. This contentious issue has sparked significant debate within Republican circles, as it could provide major relief for high-tax states like New York, improve affordability for homeowners, and incentivize high-income earners to remain in the region.
Rising Costs and Maintenance Challenges
The rising costs of key operational expenses are presenting significant challenges for property owners and managers. From one cooperative in 2020 to 2024, the cost of insurance has surged by 68.83%, driven by increasing climate risks and tighter underwriting standards. Utility costs have increased by 44.41%, reflecting higher energy prices and greater demand. These factors are straining maintenance budgets and pushing landlords, cooperatives, and condominiums to explore cost-saving measures, such as energy-efficient upgrades and alternative insurance structures.
Home Insurance Trends
Rising insurance costs are prompting some homeowners to drop their policies altogether, especially in regions prone to climate-related risks. According to recent reports, national trends indicate a growing number of homeowners opting to go without insurance, which can have severe implications for both individual finances and broader market stability.
New Brokerage Rules
New rules require formal touring agreements between buyers and brokers, aiming to clarify roles and ensure transparency in buyer representation. Buyers must now sign agreements before viewing properties, which may deter casual shoppers but provides brokers with greater security and exclusivity.
Looking Ahead
The themes outlined above underscore the need for adaptability and informed decision-making. At The Roebling Group, we’re dedicated to helping our clients navigate these complexities with tailored strategies and expert guidance.
Thank you for reading this edition of The Roebling Report.
Best,
Corey Cohen
Founder
The Roebling Group
646.939.7375
@mrcoreycohen
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