Following a year when many hit “pause” on real estate decisions as they waited out big unknowns — including questions about the direction of mortgage rates, the outcome of the presidential election and the National Association of Realtors’ rollout of significant changes to how buyers and sellers engage with agents — it’s going to be a whole new ballgame in 2025.

Now, even as market conditions continue to fluctuate, new forces and attitudes are emerging that will shape the year ahead in residential real estate. Here are five trends Taylor Johnson’s national housing and design experts say to watch in the coming months:

(NOTE: To go directly to the trend, please click on the headline below or scroll down for write-ups. A full image gallery is available here. For original expert commentary/interviews on these trends, contact Sarah Lyons at (312) 267-4520 or slyons@taylorjohnson.com or Kim Manning at (312) 267-4527 or kmanning@taylorjohnson.com.)

  1. For-Sale Signs Are Back
  2. Mental Health Meets Mindful Design
  3. Water Works: From Wet Rooms to Cold Plunge Pools
  4. 5D Design
  5. Talkin’ ‘Bout My Generation(s): Gen X and Gen Z Hit Transitional Years
  1. For-Sale Signs Are Back

Although the past year saw some bright spots in home sales, many would-be homebuyers and sellers opted to stay on the sidelines in 2024 in hopes of waiting out still-high interest rates and a relative shortage of existing home inventory. Now that Federal Reserve rate cuts have begun, experts anticipate buyers and sellers alike have adjusted to current mortgage conditions as the “new normal” and will make moves in 2025. That optimism is trickling down to builders and developers, who are more bullish about introducing new for-sale projects — from downtown cores to exurbia. That extends to condominiums, too. New condo developments are ramping up in markets where there’s been a lull in construction, including downtown Chicago, while a growing wave of condo conversions could potentially lead the broader condo comeback in some cities.

  1. Mental Health Meets Mindful Design

Wellness was a priority for the real estate industry well before the pandemic. But amid the growing conversation around mental health — 1 in 5 U.S. adults are estimated to live with a mental illness — many are looking to the built environment to enhance mental well-being. As such, 2025 will see more design solutions actively support mental wellness, including spaces to maximize connectivity with others or, alternatively, prioritize rest and rejuvenation; aesthetics that trigger “feel-good” hormones; and locations with direct access to natural elements like water that are proven to have measurable health benefits. Additionally, various residential typologies are addressing mental well-being through targeted programming and design, from student housing communities that support neurodivergent learners to affordable and senior living developments that connect residents with wellness-focused social services.

  1. Water Works: From Wet Rooms to Cold Plunge Pools

As the median size of U.S. new-construction homes continues to decrease, architects and designers say wet rooms are likely to see an uptick in popularity given they require less square footage than a traditional primary bath. Their sleek and efficient layout, which typically features a glass enclosure around a curb-less shower and tub area, is also gaining traction as a stylish way to enhance future accessibility for aging in place. Also on the rise are cold plunge pools, as Americans embrace the therapeutic benefits of cold-water immersion. While 2023 and 2024 saw the exponential growth of the cold plunge trend, which expanded from athletic and commercial uses to private homes, the next wave is upon us with savvy multifamily developers already adding cold plunge pools to their roster of must-have amenities.

  1. 5D Design

Thinking beyond static vignettes, real estate firms in 2025 are following the lead of national home product brands in creating experiential opportunities to interact with their products. The result? Real-life inspiration for those outfitting a home via design studios and subcontractor workshops that invite engagement. These spaces reimagine the showroom experience, bringing it to life by encouraging visitors to spend time there just as they would at a local coffee shop. Some are achieving this by adding small cafes and other amenities like public Wi-Fi to draw in prospects. This surround-sound approach, in which visitors are enveloped by the designer’s aesthetic in a homelike environment, creates a multisensory experience with the opportunity to see, feel and test out different materials and product lines available for their project. Customers may even have the opportunity to watch their final selections be fabricated on-site, giving them full visibility into the process.

  1. Talkin’ ’Bout My Generation(s): Gen X and Gen Z Hit Transitional Years

In 2025, there will be two significant generational shifts underway that will shape housing and design in the years to come.

First, as of Jan. 1, 2025, the oldest members of Gen X will begin celebrating their 60th birthdays, marking a major milestone for this cohort that, although sandwiched between the larger baby boomer and Gen Z groups, has had an outsized impact on society. Now, with Gen Xers entering a decade when many go through transitions such as becoming empty nesters, downsizing and entering retirement, their housing choices are poised to have a notable influence on development activity. Real estate experts are planning for this in everything from the rental market — where Gen X tends to choose larger units, stay in one place longer and gravitate toward boutique properties within their neighborhood of choice — to senior living and age-restricted developments with a hospitality influence that appeals to Gen Xers.

Meanwhile, the oldest members of Gen Z will be hitting milestones of their own in 2025 with their 30s just two years away. As they settle into adulthood, build careers and start families, the housing needs of this group can shift quickly during this still relatively transient period, making them an important cohort for those who design and develop for-sale and rental housing. Add in the fact that 77% of Gen Z prioritizes a work-life balance and those hoping to capture these digital natives in 2025 will likely be focused on homes that also work harder and smarter — from shorter commute times and better work-from-home layouts to building apps that help schedule their lives and plan events that fill their social calendars.

PHOTOS:       Click HERE to view images that accompany this release via Dropbox.