Texas Real Estate Forecast: 7 Homes Likely To Decline By The End Of 2025 (And 13 Gaining Ground)
The Texas real estate landscape is shifting dramatically this year. Market forces, changing buyer preferences, and economic factors are creating clear winners and losers in property values across the Lone Star State.
Understanding which home types will likely lose value and which are poised for growth can help homeowners and investors make smarter decisions in this evolving market.
1. Large Luxury Homes In Far Suburbs
The appeal is fading fast for these sprawling mansions. Rising property taxes and maintenance costs are making these once-coveted estates less attractive to buyers.
Large luxury homes located hours from employment centers face declining demand as remote work becomes more selective. Younger buyers increasingly prioritize location and efficiency over sheer square footage.
2. Older Energy-Inefficient Homes
Escalating utility costs are turning these properties into money pits. Texas summers keep getting hotter, making inefficient cooling systems particularly problematic for budget-conscious buyers.
Older energy-inefficient homes with outdated windows, poor insulation, and aging HVAC systems face steep value declines. Renovation costs often exceed what sellers can recoup in today’s market.
3. Condos In Overbuilt Urban Markets
Supply is outpacing demand in several Texas metro areas. New luxury developments continue to break ground despite softening rental returns.
Condos in saturated markets like parts of downtown Dallas and Austin face downward pressure on prices. Higher HOA fees coupled with rising interest rates make these properties less attractive investment vehicles compared to alternative housing options.
4. Homes In Flood-Prone Or Climate Risk Areas
Insurance premiums are skyrocketing in vulnerable zones. Recent severe weather events have made buyers increasingly wary of properties in known risk areas.
Homes in flood-prone regions face declining buyer interest as climate concerns grow. Properties along the Gulf Coast and in low-lying areas near major waterways are particularly susceptible to value erosion as flood maps get updated.
5. Small Starter Homes In Declining School Districts
Educational quality drives real estate decisions for many families. When school ratings fall, property values often follow suit in affected neighborhoods.
Small starter homes in areas with struggling schools are seeing buyer interest wane significantly. Even first-time homebuyers are stretching their budgets to secure properties in better-performing districts, leaving these homes with fewer potential buyers.
6. Mid-Century Homes With Costly Renovation Needs
Construction material costs remain stubbornly high. Labor shortages in the renovation industry have pushed project timelines and budgets beyond what many buyers will tolerate.
Mid-century homes requiring significant updates face challenging market conditions. Properties with original electrical systems, outdated plumbing, or foundation issues are particularly vulnerable as buyers increasingly prefer move-in ready options.
7. Homes With Large Acreage Far From Cities
Commuting costs and time constraints are limiting buyer pools. The romance of country living fades when faced with practical realities of distance from amenities.
Homes on large rural parcels located far from employment centers are losing appeal. Rising property taxes on agricultural land, coupled with limited internet connectivity in some areas, further diminishes the attractiveness of these once-coveted rural estates.
8. Modern Energy-Efficient New Builds
Utility savings create instant appeal for budget-conscious buyers. Solar panels, smart thermostats, and high-efficiency appliances are becoming standard features rather than luxury upgrades.
Modern energy-efficient homes are commanding premium prices across Texas markets. Builders incorporating green technology are seeing faster sales and higher returns as buyers increasingly factor long-term ownership costs into their purchasing decisions.
9. Townhomes In Walkable Suburbs
Convenience meets affordability in these increasingly popular properties. Young professionals and empty nesters alike are flocking to these low-maintenance options with urban amenities.
Townhomes in pedestrian-friendly suburban areas are seeing robust appreciation. These properties offer an attractive middle ground between urban condos and traditional single-family homes, providing community atmosphere without sacrificing privacy.
10. Single-Family Homes In Strong School Districts
Education remains a top priority for family homebuyers. Properties within boundaries of highly-rated schools continue attracting premium offers even in cooling markets.
Single-family homes in top-performing school zones are maintaining strong value growth. The limited supply of housing in these coveted districts creates consistent demand regardless of broader market conditions, making them relatively recession-resistant investments.
11. Small Urban Homes With Outdoor Space
Balance is the new luxury in urban living. Modest interior square footage becomes much more appealing when paired with usable outdoor areas.
Small urban homes featuring private gardens, patios or rooftop decks are experiencing strong buyer interest. The pandemic permanently shifted priorities toward outdoor living space, making these properties particularly attractive to buyers who want city convenience without sacrificing outdoor enjoyment.
12. Mid-Sized Homes With Flexible Floor Plans
Adaptability has become a key selling point. Spaces that can transform from home offices to guest rooms to hobby areas attract today’s versatility-minded buyers.
Mid-sized homes with flexible layouts are seeing strong market performance. Properties featuring bonus rooms, convertible spaces, or open-concept designs that can be easily reconfigured appeal to multi-generational families and those needing workspace options.
13. Properties Near Emerging Tech Hubs
Silicon Hills is expanding beyond Austin. As tech companies establish satellite offices throughout Texas, nearby housing markets heat up rapidly.
Properties located near growing technology centers are experiencing strong appreciation. Homes within commuting distance of new corporate campuses in places like Frisco, Round Rock, and San Antonio’s tech corridor are particularly well-positioned for continued value growth.
14. Senior-Friendly Single-Story Homes
Demographics are driving demand for accessible housing. Aging baby boomers seek homes that will accommodate their changing mobility needs without sacrificing style.
Senior-friendly single-level properties are attracting multiple offers in many Texas markets. Wide doorways, zero-step entries, and primary bedrooms with attached baths make these homes appealing to both older buyers and those planning to age in place.
15. Homes In Tax-Friendly Cities/Suburbs
Financial considerations are pushing migration patterns. Areas with lower property tax rates are attracting residents fleeing higher-tax regions both within and outside Texas.
Homes in municipalities offering tax advantages are seeing accelerated appreciation. Properties in cities and towns with favorable tax structures, particularly those within commuting distance of major employment centers, continue attracting out-of-state buyers seeking financial relief.
16. New Construction In Growing Exurbs
Affordability is pushing development further out. Builders are creating new communities where land costs allow for better value propositions.
New construction homes in emerging exurban areas are seeing strong sales activity. Properties in developing communities beyond traditional suburbs offer buyers more square footage and amenities at lower price points, attracting young families and remote workers no longer tied to daily commutes.
17. Homes With Sustainable Landscaping
Water conservation is becoming non-negotiable. Drought-resistant yards reduce maintenance costs while appealing to environmentally-conscious buyers.
Homes featuring xeriscaping and native plant landscaping are commanding premium prices. Properties with water-efficient outdoor spaces appeal to buyers concerned about both sustainability and rising water bills, particularly in drought-prone regions of Central and West Texas.
18. Urban Lofts In Revitalized Downtowns
City centers are experiencing renaissance moments. Historic buildings converted to residential spaces offer character unavailable in newer construction.
Urban lofts in rejuvenated downtown areas are attracting premium buyers. Properties in revitalized districts of Houston, Dallas, San Antonio and smaller cities like Waco are particularly appealing to young professionals and empty nesters seeking walkable lifestyles with cultural amenities.
19. Properties With ADUs (Accessory Dwelling Units)
Income potential drives buyer interest in these versatile properties. Separate living spaces provide rental opportunities or multi-generational housing solutions.
Properties featuring accessory dwelling units are experiencing strong market demand. Homes with backyard cottages, garage apartments, or basement units offer buyers flexibility for housing extended family members or generating rental income to offset mortgage costs.
20. Smart Homes With Tech Upgrades
Technology integration has moved from luxury to expectation. Buyers increasingly view smart features as standard rather than premium upgrades.
Smart homes with integrated technology systems are commanding higher prices. Properties featuring automated lighting, security, climate control and entertainment systems appeal to tech-savvy buyers willing to pay premiums for convenience and the perception of modern living.
