US Real Estate Sector NAICS 531

Nov 21, 2025 - Warehouse Market Conditions Improve

• Industrial real estate is showing signs of stabilization, with climbing demand and a shrinking supply pipeline helping to ease vacancy pressures, according to Supply Chain Dive. Colliers reports Q3 net absorption increased by 20 million square feet year over year and was the strongest since Q1 2023. Companies are increasingly comfortable making long-term decisions, despite tariff-related uncertainty, according to Prologis President Dan Letter. Ecommerce and supply chain investments are driving demand as firms aim to improve service while reducing costs. Letter noted that large, well-capitalized companies are leading the way, often followed by smaller businesses. Meanwhile, Colliers reports that industrial space under construction fell to 270 million square feet in Q3, the lowest since 2018. Despite this, markets like Dallas-Fort Worth and Houston are seeing construction growth amid consistent tenant demand.
• Home-purchase cancellations are rising nationwide, with 15% of deals falling through in September, up from 13.6% a year earlier, according to Redfin and reporting by The Wall Street Journal. Economic uncertainty, job insecurity, and high home prices are making buyers more cautious, while sellers with low mortgage rates feel little urgency to negotiate. Buyers now have more leverage due to increased inventory, but deals often collapse over inspection disputes or unexpected costs. Sellers risk longer listing times and buyer skepticism. In Florida, cancellations are especially high, while areas with less new construction see fewer withdrawals. Agents recommend pre-inspection reports and backup offers to reduce cancellations. Despite a slight sales uptick due to lower mortgage rates, both buyers and sellers remain hesitant, reflecting a deepening uncertainty in the housing market.

• US office vacancies dropped to 18.8% in Q3 from 19% a year earlier, marking the first year-over-year decline since the pandemic, according to CBRE and reporting by Facilities Dive. Vacancies are falling amid a drop in new construction and the conversion or demolition of older spaces. Leasing activity rose 15% over Q2 2025 and 11% year over year. However, the average lease size in Q3 was down 24% from pre-pandemic levels, partly due to the prevalence of hybrid work. Small occupiers led demand, with leases between 10,000 and 20,000 square feet making up 56% of year-to-date activity. Remote-heavy markets such as Washington, DC, Boston, and Seattle saw demand surge, while traditional hubs like New York and Chicago declined. Prime buildings outperformed, with vacancy spreads widening. Average rents rose 1.7% to $32.47 per square foot, though inflation-adjusted asking rents remain at their lowest since 1988.
• The National Association of Realtors' 2025 Profile of Home Buyers and Sellers reveals a sharp decline in first-time home buyers, now just 21% of home purchases, with a median age of 40. This shift reflects deep challenges of affordability and a market increasingly dominated by older, equity-rich repeat buyers. Sellers are staying in their homes longer, 11 years on average, further limiting inventory turnover. Buyers with cash and assets are driving transactions, while younger would-be purchasers struggle to enter the market, delaying wealth-building and reducing lifetime mobility. Policymakers are urged to address supply constraints by unlocking inventory, streamlining zoning regulations, and facilitating faster and more affordable construction. Despite these challenges, agent usage remains strong, with over 90% of buyers and sellers relying on real estate agents. The data underscores a bifurcated market and signals long-term shifts in buyer demographics, transaction volume, and housing wealth distribution.