I’m a Real Estate Expert: 3 Reasons the Southwest Will Be the Best Market for Buyers in 2025
Written by
Martin Dasko
Edited by
Amber Barkley
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According to research from Zillow, the Southwest will be a buyer’s market in 2025, with inventory continuing to increase in fairly affordable regions. Even though most of the 13 major metro areas with buyer’s markets were in the Southeast in 2024, Zillow expects this trend to change this year.
Even though affordability will still be an issue, Zillow’s prediction that there will be more homes on the market should give buyers more leverage when it comes to negotiations.
GOBankingRates spoke with real estate agents who agreed that the Southwest should be a buyer’s market in 2025. Here are their thoughts — and specific areas that might see a buyer’s market.
There’s an Expected Boost in Housing Inventory
Alexei Morgado, Realtor and founder of Lexawise, agreed with the projections that some parts of the Southwest will be a buyer’s market in 2025.
Morgado added, “The main reason for this change is an expected boost in housing inventory, which would give buyers a wider variety of choices and lower competition.”
With additional housing options available, sellers will have to negotiate with buyers, which should bring the prices down in 2025 if interest rates don’t drop drastically.
The Southwest Has Experienced Growth
“The Southwest has seen rapid growth in the last few years, attracting both individuals and businesses,” said Sam Martinez, a real estate expert and author at VivoLatam.com. “However, many markets have also experienced an oversaturation of new builds, which, combined with higher interest rates and economic factors, may create more negotiation power for buyers moving forward.”
Population growth in the Southwest has led to new builds, which means there are more options in this region. If interest rates don’t significantly drop, then there may be fewer buyers, so those who are in the market could get a better deal.
Housing Market Dynamics Have Shifted
“For some years, the Southwest has been on a prolonged development curve as tech businesses relocate and retirees swarm to sunnier environments,” said Tim Choate, a real estate expert and founder of RedAwning. “By 2025, I see a mix of market saturation and perhaps declining demand to provide consumers with more negotiating power.”
Morgado pointed out how buyers have to be mindful of the shifting mortgage rates that also dictate the way the market behaves. “The landscape in the Southwest appears to have really shifted towards being a buyer’s market, at least for 2025 and in areas where inventories are rising.”
Martinez noted that cities in the Southwest, like Phoenix, have seen an influx of new developments, but sales have slowed, creating a more balanced supply and demand dynamic. This means that sellers in this area will have to be more flexible if they want to move inventory.
Which Markets in the Southwest Could Be Best for Buyers?
“I believe that the Southwest will be a key region for buyers in 2025, particularly as the market stabilizes and affordability becomes a more significant factor,” Martinez said. “Buyers should look for areas where development outpaces demand or where rapid price increases start to level off, giving them more room for negotiation.”
Martinez pointed to San Antonio and Austin, Texas, as areas that “may experience a more subtle transition, as both areas have seen booming growth. … However, the rapid appreciation in home prices in recent years is beginning to stabilize, which could lead to a shift toward more buyer-friendly conditions.”
“Areas like Phoenix and Tucson in Arizona are likely to experience an increase in new constructions, making the market more balanced,” Morgado said. “The same goes for an extended availability of housing that can push parts of Nevada, like Las Vegas, into a buyer’s market, while this might not be so in other locations, like Southern California, that face a continued shortage of housing.”
Choate also mentioned Phoenix and Las Vegas as typical candidates for buyers. As for smaller areas, he said Albuquerque, New Mexico, El Paso, Texas and suburbs of Flagstaff, Arizona are places to watch.
“Along with new infrastructure developments and an increase in local companies, these areas provide homes at price points below those of larger metros,” he explained.
What Should Buyers Look for in the Southwest?
While the experts agree that the Southwest could be the best market for buyers in 2025, you also want to look out for the right properties.
Choate explained, “Buyers who choose houses with solar installations, greywater systems or imaginative expansions — like casitas for rental income — that go beyond conventional resale homes will find more upside in both resale value and monthly utility savings.”
If you’re in the market for buying a home in 2025, you’ll want to explore your options in the Southwest, where you could have a higher degree of negotiating power with more housing options.
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