New Orleans will again take a dubious ranking in Zillow’s predictions for the best and worst markets for 2025.
The massive real estate marketing company projects a 3.8% drop in the typical home value this year for New Orleans homes.
Zillow released its forecast for the 2025 U.S. housing market this month. The company ranked the nation’s 50 most populous metros using data detailing local home value growth, job growth per new home, projected change in owner-occupied households and the speed at which sellers are entering contracts with buyers.
Those at the top of the list are said to have the “hottest” markets, while those at the bottom have the “coolest.”
New Orleans was No. 50 on the list, meaning Zillow predicts it will have the “coolest” market of all. Rounding out the bottom five was San Francisco; San Jose, California; Portland, Oregon, and Austin, Texas.
Common characteristics of the “coolest” real estate markets were weak demographic and job market pressures relative to the housing environment and their home value projections standing flat or falling, according to Zillow’s methodology.
Top real estate markets
Buffalo, New York, topped the list after previously topping it in 2024, the first back-to-back gold medal in Zillow’s forecast. Zillow projected that Buffalo will see continued competition among buyers and the city had the most new jobs per new home permitted.
The remaining top five were rounded out by Indianapolis; Providence, Rhode Island; Harford, Connecticut; and Philadelphia.
Hot markets were also projected to be moving into the Midwest and West while Zillow predicted slow but steady growth for home values and sales.
The hottest housing markets shared relative affordability and supply that trailed demand, Zillow said in its report. Indianapolis’ second-place ranking was attributed to its strong home price forecast for 2025, increasing from 2.8% annual appreciation in 2024 to 3.4% in 2025.
Indianapolis was the only top-five market to have a rising home value appreciation this year, Buffalo’s appreciation was expected to drop to 2.8%.
Alternatives to expensive northeastern cities like New York City and Boston, such as Providence, Hartford and Philadelphia also placed highly.
Zillow projected all but five of the markets to have positive appreciation and for home value growth to largely level out.
While the inflow of new listings recovered slightly last year, rate-lock has kept inventory from rising to pre-pandemic levels.
Homes have also stayed on the market longer before selling. Low-inventory markets are likely will continue to see outsized demand relative to supply in 2025, Zillow said.
Here are the ranking highlights
Top 10 hottest markets
1. Buffalo, New York
2. Indianapolis, Indiana
3. Providence, Rhode Island
4. Hartford, Connecticut
5. Philadelphia Pennsylvania
6. St. Louis, Missouri
7. Charlotte, North Carolina
8. Kansas City, Missouri
9. Richmond, Virginia
10. Salt Lake City, Utah
Bottom 10 coolest markets
41. New York City, New York.
42. Milwaukee, Wisconsin
43. Memphis, Tennessee
44. Denver, Colorado
45. Minneapolis, Minnesota
46. Austin, Texas
47. Portland, Oregon
48. San Jose, California
49. San Francisco, California
50. New Orleans, Louisiana
