More positive tailwinds for real estate investments in 2025
Investment opportunity indicators strong for multifamily housing and senior living
Investors considering opportunities in real estate this year, including the multifamily housing and senior living sectors, have reason for optimism. Numerous positive tailwinds suggest great potential for an upturn in real estate as the industry anticipates improving financing conditions, surging demand, and continued supply shortfalls. These tailwinds suggest a robust rebound or recovery from challenges of the recent past related to rising interest rates, a restrictive lending environment and the pandemic.
Let’s examine the two specific real estate investment sectors that impact our circle the most: multifamily housing and senior living.
Tailwinds for multifamily housing investments in 2025
Strong returns are indicated in real estate, including the multifamily housing sector, due to several factors. Among them, interest rates continue to moderate, pushing real estate values up. Also, as single-family housing remains out of reach for many would-be homeowners — due to low inventory, high mortgage rates and high home purchase prices — demand for multifamily housing remains robust. Construction of new multifamily housing and homes declined with the uptick in interest rates, suggesting the potential for even greater demand, higher rent growth, and increased values ahead.
The evolution of the “American Dream” is also noteworthy for multifamily housing investors. A recent survey by Entrata, a property management software provider, found that 41% of renters say homeownership is no longer part of their American Dream, and 20% of respondents expect to rent for life.
Tailwinds for senior living investments in 2025
The U.S. population is undergoing a massive metamorphosis, with the baby boomer generation crossing the threshold of 65+ in droves and anticipated exponential growth in demand for senior housing.
For the past few years, investors and developers have overcome numerous hurdles, from pandemic protocols to rising interest rates and stagnant occupancy numbers. All of that is shifting with the prevailing tailwinds — as financing conditions improve and demand for senior housing increases, driving down vacancy rates.
Demographic shifts will play a huge role in 2025 and the coming decades as the “Silver Tsunami” crashes ashore on the senior housing industry. With a projected growth of the 80+ population by 47% in the next ten years, new senior housing units will be in high demand throughout the country, including in La Crosse, WI, Rochester, MN and the surrounding areas.
Other possible tailwinds to consider are the shifting policies at the federal level under the new administration, which may lead to deregulation of the financial sector and potentially lower taxes. Changes to these areas of consideration could potentially impact both the senior living and multifamily housing sectors.
Ready to build a new senior living community or multifamily housing development?
The investment forecasts are in, and they look promising. When you’re ready to build a new multifamily housing development or senior living community in Western Wisconsin or Rochester, MN, we can help. Our experienced design and build team can help you maximize these positive tailwinds to drive your portfolio success in 2025 and beyond. Contact us to learn more about how the design and build model of commercial construction can help you capture opportunities in both the multifamily and senior housing sectors.