- Cities like Columbus, Denver, and Nashville are approaching or have recently experienced supply peaks, creating uncertainty around how demand will absorb the new inventory.
- Markets like Jacksonville and Denver show early signs of recovery but still face challenges from low occupancy and rent cuts.
- In cities like Nashville, suburban markets could rebound faster than urban cores, where oversupply issues linger.
- Despite strong occupancy trends, New York’s performance in 2025 will hinge on how new supply impacts specific neighborhoods.
As 2025 approaches, certain US real estate markets are emerging as wild cards, where a wide range of performance outcomes is possible. According to GlobeSt, RealPage has identified five markets that merit close attention this year.
These markets face unique challenges, such as supply surges, rent cuts, and uneven demand recovery. While some show signs of stabilization, others will be tested by their ability to absorb new inventory or navigate shifting demand trends. Here’s a closer look at these five markets and what will make them stand out in the year ahead.
1. Columbus
Columbus is gaining traction as an investor favorite in the Midwest, but a surge in new supply could test its market fundamentals. RealPage Market Analytics forecasts nearly 4% inventory growth in 2025, with 8,200 new units expected. While this growth is modest compared to Sun Belt markets, it represents one of the latest peak supply periods nationwide. The key question will be whether demand can keep up with this added inventory, as rent growth could face pressure in the short term.
2. Denver
Denver enters 2025 with annual rent cuts of 3.5%, ranking among the steepest declines in the nation’s top 50 markets. With its supply peak still approaching, the city is set to add 6.5% to its current inventory. However, there may be some hope for recovery, as Denver recently recorded its strongest job growth in over a year. Whether improving demand can offset supply pressures remains uncertain, making this market one to watch.
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3. Jacksonville
After struggling with rent cuts of nearly 6% in mid-2024, Jacksonville is beginning to show signs of stabilization. Peak inventory growth of 6.5% in 2024 is now behind it, with a more manageable 3% inventory increase expected for 2025. However, low occupancy levels—still below 94%—pose ongoing challenges. If demand picks up, Jacksonville could start rebounding, but its recovery will likely be gradual.
4. Nashville
Nashville faces massive inventory growth, with nearly 13,000 new units added in 2024, equivalent to 7% of its existing supply. Most of this supply is concentrated in the urban core, creating a market split: slow recovery in the downtown area versus a potentially faster rebound in the suburbs, where supply levels will ease in 2025. While challenges remain, suburban Nashville may outperform urban areas in the coming year.
5. New York
New York’s occupancy has rebounded to 97%, reflecting a strong recovery from its low occupancy in early 2020. Rent growth could align with other Gateway markets, but upcoming supply could introduce variability. With nearly 32,000 units slated for delivery by early 2026—up from 19,000 in 2024—some neighborhoods may face oversupply. How this impacts institutional-grade assets will determine the market’s overall performance in 2025.
The Bigger Picture
While supply and demand imbalances persist in these unpredictable markets, the nuances of local job growth, economic health, and tenant preferences will be key factors to watch in 2025. Markets like New York, Denver, and Nashville are particularly volatile, offering potential opportunities and risks for developers and investors alike.
