6 Cities Where the Cost of Living Could Plummet in 2025
Written by
Angela Mae
Edited by
Gary Dudak
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The cost of living, which is largely defined by housing prices, has risen in many parts of the country in recent years. Right now, according to the U.S. Department of Housing and Urban Development, the average home sales price is $487,300. Rental prices aren’t exactly cheap either, as RentCafe states that the average price of an 899 sq. ft. apartment is $1,713.
Some parts of the country are cheaper to live than others, however. It’s also possible that prices in certain areas will drop next year, though only time will tell.
Still, if you’re wondering where the cost of living could plummet in 2025 and beyond, you’re in luck. GOBankingRates spoke with several financial and real estate experts on this very matter. Here are their predictions below, and you can also check out five types of homes that may soon plummet in value.
Detroit
“Detroit is a city that has been experiencing a resurgence, but I believe the cost of living could decrease in 2025 due to potential overvaluation in its housing market,” said Dennis Shirshikov, a finance professor at the City University of New York, real estate professional, and head of growth at GoSummer.
According to Shirshikov, there’s been a wave of gentrification and investment in the city, which has driven up both property prices and rents. That said, he predicts changes on the horizon largely due to population declines and limited job opportunities for those looking to move to the area.
“Investors who have over-leveraged in the area might be forced to sell, leading to a drop in housing prices,” he added.
As of August 2024, the average home price in Detroit according to Zillow is $74,882. Apartments go for about $1,056 a month on average, according to Apartments.com.
Cleveland
Shirshikov also believes that the cost of living in Cleveland will plummet going forward.
“The underlying economic fundamentals, such as job growth and population stability, don’t fully support the recent rise in living costs,” he said. “If the local economy doesn’t catch up with the housing boom, we could see a reversal in property values and a more affordable cost of living in the coming years.”
The average home prices in Cleveland is $112,983. The typical apartment rental price is $1,225.
Houston
The typical home value in Houston is $271,420, while the average apartment rental is $1,171. This is already below the national averages, but some experts believe prices could fall.
“Houston’s economy is heavily dependent on the oil and gas industry,” said Rachel Stringer, an agent with Raleigh Realty and real estate expert. “If energy prices fall significantly in the coming years, it could lead to economic challenges for the city. This might result in a softening of the housing market and a decrease in living costs.”
Las Vegas
While home prices are on the rise in Las Vegas — up to $428,770 this year — Stringer predicts the overall cost of living will plummet in the next year or so.
“Las Vegas saw a significant amount of new construction in recent years,” she said. This, of course, is largely due to greater demand from prospective buyers. If supply starts to outpace demand, such as due to limited job opportunities or people looking elsewhere — like the Southern states — for property, it could result in lower all-around prices.
Tallahassee, Florida
In Tallahassee, the average home value is $289,841. This is already below the national average, but Seamus Nally, CEO of TurboTenant, thinks the city could become more affordable in the future.
“This is because it is already trending downwards in terms of cost of living,” he said. “Average rent prices have decreased and don’t indicate that they will be going upwards anytime soon. Since housing costs make up such a significant percentage of cost of living, that indicates that Tallahassee will be a lot more affordable for people in 2025 in terms of cost of living.”
San Francisco
San Francisco isn’t known for its affordability, especially in terms of housing. The average home value is $1,290,350, while the typical rental price is $2,851.
But anything is possible — including the cost of living dropping in the future.
“Although there is still a lot to like about San Francisco, many people are turned off by the high cost of living there,” said Rinal Patel, a licensed real estate agent and co-founder of a homebuying company.
Depending on what happens going forward, this could lead to less demand for homes — and apartments — and potentially bring prices down.
Bottom Line
While you can make some predictions about the cost of living in certain areas, there are no guarantees. Prices could fall, but they could also fluctuate based on factors like housing supply and demand, local job opportunities, the potential for remote work, and so on.
If you’re thinking about moving somewhere, do some research ahead of time and make sure the decision suits your needs and preferences.
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