Real Estate Roundup: March 5, 2025
Leonard Steinberg, Compass Agent
February brought a whirlwind of industry updates, market trends, and thought-provoking insights into real estate, economics, and shifting consumer behaviors. From tariffs impacting construction costs to generational wealth transfer and the evolving real estate landscape, let’s dive into some of the biggest takeaways from the month.
Tariffs & Construction Costs: What’s the Impact?
The looming 25% tariffs on Mexico and Canada, alongside a 10% duty on China, could significantly affect building costs in the U.S. Given that 11% of construction materials come from Mexico and 27% from China, builders are bracing for increased expenses, which may trickle down to consumers. Expect rising costs, tighter margins, and a potential reshuffling of supplier networks.
Aviation vs. Driving: The Numbers Don’t Lie
Recent headlines reminded us of the relative safety of air travel compared to driving. While plane crashes grab media attention, the risk remains substantially lower than car travel. In fact, flying is about 190 times safer than driving when measured in fatalities per miles traveled. Just another reason to buckle up and drive safely!
Generational Wealth Transfer & Shifting Priorities
As we continue to witness the historic $120+ trillion generational wealth transfer, one clear pattern emerges: second and third generations often have vastly different aspirations from their predecessors. Many heirs reject taking over family businesses, opt for alternative lifestyles, and even downplay their wealth in ways previous generations never considered. This shift has major implications for real estate agents and wealth advisors alike—understanding these changing preferences is key to serving next-gen clients.
Widow Wealth & Real Estate
A staggering $1 trillion transfers annually from a deceased spouse to widows or widowers, with 95% of that going to women. Many surviving spouses find themselves managing wealth for the first time, facing new financial responsibilities and decisions—including real estate. This underscores the need for agents to be knowledgeable and supportive during these pivotal life transitions.
Luxury Real Estate: Trends & Hotspots
Luxury real estate continues to make waves, particularly in Las Vegas’ Henderson market (median listing price: $2.1 million) and Dubai, where extravagant mansions with unique features—like movable pool floors and retractable glass domes—are drawing in global buyers. With 435 homes over $10 million sold in Dubai last year, the city surpassed New York and Hong Kong in high-end sales. Low tax policies remain a major draw for international buyers.
Housing Affordability & Market Shifts
With more than 73 million Baby Boomers in the U.S., many will soon be downsizing or selling their homes. This shift could inject 9.2 million homes into the market by 2035. Meanwhile, affordability continues to be a key factor in buyer searches, with a strong preference for suburban areas near major cities and homes priced under $400,000. As housing shortages persist, strategic planning around these emerging trends is critical.
Compass 3-Phase Marketing: A Smarter Selling Approach
Selling real estate is no longer a one-step process. The Compass 3-Phase Marketing Strategy offers a refined approach:
Private Exclusives: Test pricing, build early demand, and maintain control before listing publicly.
Compass Coming Soon: Generate buzz across all agent networks before hitting the market officially.
Public Launch: Enter the MLS with optimized pricing and presentation to maximize exposure. This method mirrors Hollywood’s approach to movie releases—building anticipation and refining marketing strategies before the big debut.
Real Estate & Climate Migration
As climate risks grow, home values in vulnerable areas may decline. While a study predicts $1.47 trillion in home value losses by 2055, this only represents 1.5% of total projected home values. However, home insurance premiums are expected to rise by nearly 30%, forcing buyers to weigh affordability against climate resilience.
The Tech Broligarchs & Real Estate’s Future
Silicon Valley’s elite—dubbed “Tech Broligarchs”—are reshaping industries, including real estate. As AI and data centers drive electricity demand up 26% by 2028, expect major investments in energy infrastructure. Meanwhile, as high-paying tech jobs cluster in certain cities, the need for affordable housing in those regions will likely spur new residential development initiatives.
The Multiplier Effect in Property Value
Sometimes 1 + 1 = 2.5 when it comes to real estate. Buying adjacent properties can create significant value multipliers. For example, combining an oceanfront home with a neighboring non-oceanfront lot can instantly increase the total property value beyond the sum of its parts. The same applies to penthouses merging with lower-floor units—savvy investors are leveraging these opportunities for higher returns.
Final Thoughts
From economic shifts to climate risks and evolving buyer preferences, February underscored the ever-changing landscape of real estate. Whether you’re a buyer, seller, or industry professional, staying ahead of these trends is crucial.
As always, knowledge is power—and in real estate, it’s also profit.
What trends are you watching?
For more insights, tools, and updates, stay connected with Compass. Let’s continue shaping the future of real estate together.
Compass does not recommend one particular strategy or guarantee of results.*
Featuring
Leonard Steinberg
Compass Agent
