2025 kicked off after the US Fed had significantly cut interest rates toward the end of 2024. However, the market had already priced in these anticipated rate cuts; and the year was poised for improvements. Let us a do a month by month walk-through of how 2025 fared!

January

• Residential: January 2025 experienced a growing inventory of homes for sale, with active listings up significantly Y/Y as sellers returned to the market after 2024’s slowdown. The median price of homes for sale was down 2.2% compared with last year, at $400,500. (Realtor)
• Office: The office vacancy rates continued to remain at a record high. The office sector still faced a long way to go for a full recovery. (NAR)

February

US CRE sales surged 30% YoY in February, reaching $24.4B.

• Residential: U.S. existing home sales unexpectedly increased in February. This could be attributed to the rising supply that pulled buyers back into the market; however rising economic uncertainty posed a threat to limit the gains. Home sales rose 4.2% in February to a seasonally adjusted annual rate of 4.26 million units, per the NAR.
• Office: Office sales experienced a 55% YoY increase to $3.5B, supported by a 217% spike in central business district transactions.
• Retail: Retail led the charge with a 105% increase in sales volume, hitting $7.1B, driven partly by Blackstone’s $4B REIT acquisition.
• Multifamily: Multifamily remained consistent with its growth, with $7.5B in transactions at a 7% increase from February 2024.

(CBRE, Reuters)

March

• Residential: Pending home sales, homes under contract fell 5.2% across major metro areas as elevated mortgage rates and ongoing financial uncertainty continued to hold buyers back. At the same time, the inventory of homes for sale increased 28.5% year over year, marking the 17th straight month of rising supply. (Realtor)
• Retail: Overall, the retail sector had been performing strongly. The segment was adapting to changing consumer preferences and the rise of e-commerce by offering unique in-store experiences. However, there was an increase in store closures. (Cohen & Co.)
• Insights: Zillow’s market heat index showed that the market was a seller’s market, breaking out of neutral territory for the first time in 2025. Asking rents increased by 0.6% month over month in March. Rents were up 3.5% from the previous year.

April

• Housing: The inventory of homes for sale rose 30.6% year over year, extending inventory growth into its 18th consecutive month and pushing supply above April 2020 levels to a new post-pandemic high. Meanwhile, the national median list price stood at $431,250, remaining largely unchanged from April 2024. (Realtor)
• Retail: Retail sales increased 5.2% year over year in April, marking the sector’s strongest performance since early 2024. Core retail sales (excluding food service, gas, and autos) grew 5.1%, supported by a 2.5% rise in overall foot traffic. (Colliers)
• Office: Office recovery picked pace in April 2025, making it the third-busiest month since the pandemic, with office visits down just 30.7% compared to April 2019. New York City and Miami led the return-to-office trend, with NYC nearly reaching pre-pandemic levels and midweek attendance exceeding 2019 figures. (CRE Daily)
• Multifamily: The multifamily sector posted strong absorption in 2024, but its resilience seemed to be tested in 2025 as consumer sentiment weakens and economic uncertainty grows. Rising inflation expectations, softer consumer confidence, and ongoing trade tensions remain key risks to watch. (CRE Daily)
• Prices: Affordability remained the key challenge in the April 2025 housing market. The median price of existing homes rose to $414,000, up 1.8% from April 2024, while new home prices declined 2.0% year over year to $407,200. (Plymouth Title)

May

• Housing: The inventory of homes for sale increased 31.5% year over year, marking the 19th straight month of inventory growth. Supply reached a new post-pandemic high in May 2025, though it remains about 14% below pre-pandemic levels. The national median list price stood at $440,000. (Realtor)
• Office: Office absorption weakened again in May 2025 as economic uncertainty and corporate downsizing persisted. Vacancy rose to 14.1%, while rent growth slowed to 0.8%. (NAR)
• Multifamily: As of May 2025, the multifamily sector began to show signs of stabilization. Net absorption rose 19% year over year to nearly 528,000 units, while new completions declined 9%. Vacancy edged up to 8.1% as deliveries continued to outpace demand, though the gap narrowed. (NAR)
• Industrial: The industrial sector’s post-pandemic boom continued to cool, as oversupply and softer demand drove net absorption down 48% year over year to a 10-year low. Vacancy rose to 7.4% as new supply outpaced demand by roughly 4 to 1. (NAR)
• Retail: Retail demand cooled from its strong pre-pandemic levels, with net absorption turning negative and annual rent growth slowing to 1.7% as of May 2025. While consumer sentiment weakened in May, retail trade sales continued to rise, which could help offset the recent increase in store closures. (NAR)

June

• Housing: The inventory of homes for sale increased 28.9% Y/Y, thus making June 2025 the 20th straight month of inventory growth and the second consecutive month with over 1 million active listings. Inventory reached a new post-pandemic high in June 2025, though it remains 12.9% below pre-pandemic levels. The national median list price was $440,950. (Realtor)
• Office: After nearly turning positive in the first quarter of 2025, office absorption fell again in the Q2 as tenants remained cautious about committing to new leases amid broader economic uncertainty. As a result, the vacancy rate climbed to 14.1%. (NAR)
• Retail: Retail demand had weakened over the past year from June 2025, with 12-month net absorption dropping from 37.4 million to –3.9 million square feet and annual rent growth slowing to 2.0% as of June 2025. General retail was the only segment to post positive absorption in the second quarter, while neighborhood centers and malls saw the largest declines. (NAR)
• Multifamily: As of June 2025, the multifamily market showed early signs of stabilization. Net absorption rose 20% Y/Y to 531,000 units, while new completions declined 9%. Oversupply continued to impact rents in parts of the Sun Belt, while markets such as South Bend and San Francisco outperformed with above-average growth. (NAR)

July

• Housing: The inventory of homes for sale increased 24.8% Y/Y, making July 2025 the 21st straight month of inventory growth and the 3rd consecutive month with more than 1 million active listings. Inventory reached a new post-pandemic high in July 2025, though it remained 13.4% below pre-pandemic levels. The national median list price was $439,450. (Realtor)
• Office: After nearly turning positive in early 2025, office absorption slipped back into negative territory in Q2 and remained there through July, though at a much milder pace than 2024’s sharp losses. Vacancy held steady at 14.1%, while landlord concessions continued to weigh on rent growth, which remained subdued at 0.7%. (NAR)
• Multifamily: As of July 2025, the multifamily market continued to show signs of stabilization. Net absorption held steady at 512,000 units, while new completions fell 16%. Vacancy edged up to 8.1% as supply continued to outpace demand, although the gap was narrowing. Rent growth remained modest at 1.0%. (NAR)
• Retail: Retail demand had softened over the previous year, with 12-month net absorption declining from 29.4 million to –10.9 million square feet. Rent growth slowed to 1.8% but remained the strongest among major CRE sectors. Vacancy edged up to 4.3% in July, still the lowest across all major property types. (NAR)

August

• Housing: U.S. home sales declined in August 2025, falling 1.6% year over year and 5.5% from July, reflecting a mix of shifting economic conditions and typical seasonal slowdown. The deceleration was simultaneous with the end of a 17-month streak of year-over-year growth in new listings, which dropped 5.9% compared with August 2024 and fell 9.2% month over month. Despite slower sales activity, the median sales price rose 1.9% year over year to $448,000. (Remax)
• Office: The office market continued with negative absorption, though the recent losses were far more modest than the steep declines seen in prior years. Vacancy remained steady at 14.1%, while rent growth was muted at 0.9% year over year as landlords continued to lean on concessions to attract tenants. (NAR)
• Multifamily: As of August 2025, the multifamily market continued to stabilize, with absorption holding at around 506,000 units and new completions down 18%. The sector was still sorting through earlier oversupply, as new deliveries continued to outpace demand. As a result, vacancy edged up to 8.2%, and rent growth eased to 0.9% year over year. (NAR)
• Retail: The retail sector remained under pressure as e-commerce and the lingering effects of the pandemic continued to weigh on demand. Over the previous year, net absorption had turned negative and vacancy had edged up to 4.3%. Despite these headwinds, retail rent growth remained the strongest among major CRE sectors in August 2025. (NAR)

September

• Housing: Active listings rose 17.0% year over year, marking the 23rd consecutive month of inventory gains, though growth had steadily slowed since May. National inventory remained 13.9% below pre-pandemic levels, and the median list price held steady at $425,000. Nearly 20% of listings saw price reductions in September. (Realtor)
• Office: The office market showed tentative improvement, with annual losses narrowing sharply and quarterly absorption turning positive for the first time since 2021. Vacancy also edged down to 14.0%, marking its first decline in six years. (NAR)
• Multifamily: The multifamily market continued to move toward balance in September, as net absorption held steady at just over 506,000 units as developers pulled back on new construction. Vacancy edged lower, while rent growth softened, signaling a market gradually adjusting to more sustainable demand. (NAR)
• Retail: The retail sector softened in September, with net absorption slipping to –4.3 million square feet over the previous year and rent growth easing to 1.9%. Yet, retail remained the strongest-performing commercial property type, supported by low vacancy and steady consumer activity. (NAR)

October

• Housing: Active listings increased 15.3% year over year, extending inventory gains into a 24th consecutive month. However, growth had slowed each month since May, pointing to a plateau in the post-pandemic inventory recovery. The national median list price edged up 0.4% from the year ago to $424,200. (Realtor)
• CRE: October remained an active month, with $24.4 billion in sales, which was about 70% of October 2019 levels. While total dollar volume in 2025 exceeded last year’s, growth momentum had slowed significantly since 2023. By property type, industrial and multifamily led the top 50 deals. Hotels were the only sector to see an increase in deal volume compared with last year, posting 6% growth after a negative third quarter. (CNBC)
• Multifamily: The multifamily segment saw the sharpest pullback in October, with transaction volume down 27% from 2024. The sector had posted above pre-COVID volumes in the prior four months, and despite the slowdown, assets continued to trade mostly at a premium to previous sales. (CNBC)

November

• Housing: Inventory rose for the 25th consecutive month, up 12.6% year over year, though the pace of growth continues to slow as the post-pandemic supply recovery levels off. At the same time, more affordable “refuge markets” stood out nationally, posting some of the strongest price gains of 2025 as cost-conscious buyers shifted toward lower-priced metros. (Realtor)
• Office: The office market showed tentative improvement in November, with annual absorption losses narrowing sharply from last year, even as demand remained slightly negative. Vacancy held near 14.1%, while rent growth slowed to 0.7%, reflecting continued reliance on landlord concessions. (NAR)
• Multifamily: The multifamily market remained largely steady in November, with absorption softening slightly as new deliveries continued to slow and the sector absorbed prior overbuilding. Vacancy edged up to 8.3%, while rent growth eased further to 0.2%, reflecting a softer winter leasing season. (NAR)
• Retail: The retail sector softened in November, with annual absorption turning negative and rent growth easing to 1.9%, though it remained the strongest-performing major property type in terms of pricing. Vacancy held steady at 4.3%. (NAR)

December

• Housing: Inventory increased for the 26th consecutive month, rising 12.1% year over year, though growth continued to slow. Active listings fell seasonally in December by 8.9% month over month and remained well below pre-pandemic levels nationally. Buyer demand softened, with homes taking four days longer to sell than the previous year, and the national median list price edged down 0.6% year over year. (Realtor)
• CRE: The multifamily and office sectors continued to face headwinds from weak income growth, hybrid work trends, and cautious lending. However, large-scale investments and strong demand for data centers supported select segments, partially offsetting broader market softness. (CRE Daily)
• Statistical Insights: The final Primary Mortgage Market Survey from Freddie Mac showed that mortgage rates ended 2025 at their lowest point of the year. As of December 31, the average rate for a 30-year fixed-rate mortgage was 6.15%, but a year ago, it was higher at 6.91%. (WRE News)

In 2025, the U.S. commercial real estate market showed resilience across sectors despite significant policy uncertainty. Although the market began to stabilize, challenges persisted too, and were seen especially in the office sector, where high vacancies and slow leasing continued to persuade adaptive reuse and conversion strategies. In contrast, multifamily and retail assets proved relatively more resilient, supported by steady demand and improving fundamentals.

However, 2026 marks the beginning of a recovery phase, thus shifting the tone from resilience to optimism.

Planning for 2026? Clarity matters more than optimism.

Our valuation and underwriting services support informed investment decisions. Reach out to stress-test your next deal: info@therealval.com