CHICAGO: There is a nagging question to consider before you jump into home-buying after one of the worst housing slumps in American history. Will you ever make money?
Based on how the market has performed in the past, there is no clear answer.
Not that there hasn't been good news about home prices lately. Prices have rebounded in most of the largest US cities over the last five months. The closely watched S&P Case-Shiller home-price index rose 0.9 percent in July on a seasonally adjusted basis.
Low interest rates provide an added bonus: With mortgage rates still at generational lows — 30-year loans still average well under 4 percent — it's a good time to lock in a bargain.
Residential housing is still a buyer's market, and it will be for some time. There was an inventory of 2.4 million unsold homes as of July, according to the National Association of Realtors. That is roughly a 6-month supply, based on current sales trends.
But such statistics don't provide a basis for determining whether buying a home will be a money-making proposition.
Housing prices have a history of following demographic trends. When veterans came back from World War Two, for example, they wanted homes that would accommodate their growing families.
When their children — the Baby Boomers — became home buyers, they fueled the market from the late 1970s through 2006.
Historically, the two greatest surges in home prices over the past century occurred between the end of World War Two and the mid-1950s and from 1999 to 2006. When there are large numbers of home buyers of child-bearing age, that seems to correlate highly with home sales.
The last run-up in prices was the largest, according to data collected by Yale Professor Robert Shiller, author of “Irrational Exuberance” and co-creator of the Case-Shiller housing indexes. A rush to real estate combined with Baby Boomer liquidity, distrust of the stock market and a bubble mentality to drove that mania.
Homeowners got smaller price bumps during the inflationary late 1970s up until 1980, and increases remained moderate until 2000, when home prices went on a bubble-fueled tear, according to Shiller's historical data.
Is history any guide to the future performance of housing?
In one respect, yes. If the Millennial generation, born after 1980, jumps into the market en masse as their parents did, then they will bid up prices. However, that assumes they can afford to buy homes. High unemployment and wage levels that have not been keeping pace with inflation for the past decade suggest that many would-be home buyers will remain renters.
The idea that home prices will always track the rate of inflation is not always true when it comes to specific neighborhoods or regions. It is a myth that home prices consistently rise.
I took a look at my own home in the suburbs of Chicago, which we had built in 1999. If it had kept pace with inflation, it would be worth $433,000 today. For this rough calculation, I used the US Bureau of Labor Statistics Consumer Price Index inflation calculator.
After I ran the CPI calculator estimate, I discovered that my home is probably worth — based on current market value — at least $183,000 less than what 14 years of consumer price inflation would have dictated.
The housing meltdown and subsequent foreclosures have depressed housing prices by up to 50 percent in some areas.
Places like Stockton, California, which recently filed for bankruptcy, have been devastated. Atlanta is also still reeling.
Florida, Arizona, Nevada and parts of California are still feeling the effects of the housing crash.
What does this mean if you want to jump back into the housing market? You may get a bargain, but don't expect to see the appreciation the country has experienced in the past.
Housing is not like the stock market in that it could take many years, or even decades, to bounce back.
Keep in mind that this housing recession is unpredictable because it is unusual for its duration and intensity. Two national housing downturns in the 1990s (1990-91 and 1994-95) were accompanied by relatively small recessions and recoveries within a year or so.
Since the US is linked to a global economy teaming with uncertainty and a banking system that still hasn't resolved its pre-2008 issues, homes are worthwhile shelters, but they still may be dubious investments.
— John Wasik is a Reuters columnist and the opinions expressed are his own.
Housing market: It’s good time to lock in a bargain
Housing market: It’s good time to lock in a bargain
How lifestyle-led real estate is reshaping Saudi Arabia’s urban future
- Government spending, regulatory changes, and incentives for foreign investors are fueling development
RIYADH: Saudi Arabia’s real estate sector is entering a new phase, one defined by lifestyle, experience, and quality of life rather than sheer housing volume.
Driven by Vision 2030, lifestyle-focused developments are set to outperform traditional residential projects, reshaping how people live, work, and connect across the Kingdom.
Government spending, regulatory changes, and incentives for foreign investors are also fueling development. Rising demand across residential, commercial, and logistics sectors, along with the push for smart cities and sustainability, is reshaping the market.
Saudi Arabia’s real estate market was valued at $77.2 billion in 2025 and is projected to grow to $137.8 billion by 2034, with a compound annual growth rate of 6.7 percent from 2026 to 2034, according to IMARC Group.
Lifestyle-focused real estate market
Saudi Arabia’s real estate landscape has evolved beyond conventional housing. Guided by Vision 2030, it now plays a key role in enhancing quality of life, boosting tourism, and driving economic diversification.
According to Sally Menassa, partner at Arthur D. Little, what stands out today is a clear shift from volume-driven residential supply to lifestyle-led, experience-based development.
“As a result, the lifestyle-focused segment is expected to outperform conventional residential real estate, growing at around 8 percent annually over the next five years. This growth is being driven by changing consumer expectations, population growth, rising incomes, and the scale of public investment shaping new urban environments,” Menassa said.
She added that demand in the Kingdom’s real estate is rising across four key segments: mixed-use districts near urban hubs such as King Salman Park; wellness-focused communities prioritizing walkability and services; coastal living along the Red Sea with branded residences; and heritage-driven districts like Diriyah and Al Balad that blend culture, hospitality, and long-term value.
“Overall, this marks a fundamental shift in the Kingdom. Real estate is no longer an end in itself and about delivering buildings; it is becoming a platform for place-making, economic diversification, and sustained value creation,” the ADL partner explained.
From another perspective, Houssem Jemili, senior partner at Bain and Co. Middle East said: “Saudi’s real estate market is forecast at roughly 7–8 percent CAGR to 2030; ‘lifestyle’ demand is being pulled most by amenity-led mixed-use communities plus higher-spec, greener and wellness-leaning homes.”
A report from PwC Middle East released in 2025 focused on the future of sustainable real estate in Saudi Arabia, and showed that the sector is shifting toward livability-focused, high-quality urban developments. Giga-projects are driving demand for mixed-use, wellness-focused, and socially connected communities that enhance quality of life.
Imad Shahrouri, cities sector lead partner, consulting, in Riyadh at PwC Middle East said: “By placing livability and human experience at the foundation of its urban agenda, Saudi Arabia is shaping a market where lifestyle-led developments will play an increasingly influential role in driving demand and investment.”
Core lifestyle elements developers are prioritizing
Saudi developers are shifting from the traditional “build and sell” model to creating integrated lifestyle communities focused on long-term value and everyday living.
Menassa from ADL highlighted that the shift centers on enhancing public spaces — with walkable areas, parks, and wellness facilities — to promote healthier, more social lifestyles, especially for a younger, health-focused population.
“Convenience is also playing a bigger role in shaping residential districts. Schools, childcare centers, clinics, co-working spaces and a wide range of food and beverage options are increasingly located within walking distance of homes, reducing commuting time and making everyday life more efficient and connected,” she said.
The partner added: “Equally important is the role of culture and social activity. Many developments now incorporate cultural venues, entertainment spaces and destination dining, ensuring that neighborhoods remain active throughout the day and week rather than becoming dormant outside working hours.”
Menassa went on to stress that real estate in Saudi Arabia is evolving into a strategic tool for quality of life, tourism, and talent attraction. Driven by Vision 2030, developments now integrate smart infrastructure and global lifestyle standards, while staying rooted in local culture to meet the needs of a young, urban population.
FASTFACT
Driven by Vision 2030, lifestyle-focused developments are set to outperform traditional residential projects, reshaping how people live, work, and connect across the Kingdom.
From Bain’s lens, Jemili said: “Developers are prioritizing livable neighborhoods. Walkability, parks and sport, culture and entertainment access, and everyday convenience, shaped by Vision 2030’s Quality of Life agenda and the 70 percent homeownership-by-2030 push.”
Shahrouri from PwC shed light on how developers in the Kingdom prioritizing livability, wellbeing, and inclusive, community-focused spaces are, aligning with Vision 2030’s push to enhance daily life and promote social integration while reflecting local identity.
“As a result, lifestyle-led elements such as walkable neighborhoods, activated public spaces and integrated community facilities are becoming central to new destinations, ensuring future developments foster more connected, resilient and experience-rich ways of living,” he said.
Regions, cities key hubs for experiential development
Several Saudi cities are emerging as prominent centers for lifestyle-focused, experiential development, each defined by its unique urban and economic character.
From ADL’s perspective, Riyadh is leading this shift as it positions itself as a global capital. The city is seeing strong demand for integrated, mixed-use districts that support live-work-play lifestyles.
“Developments such as KAFD, Diriyah, and areas surrounding King Salman Park reflect a growing preference for urban living that combines employment, culture, green space, and entertainment in close proximity,” Menassa said.
“Jeddah’s appeal is different, but equally compelling. Its strength lies in its coastal character, historic fabric, and more relaxed urban rhythm. Waterfront regeneration and heritage-led districts, particularly around Al Balad, are driving interest in developments that blend walkability, culture, and sea-facing lifestyles — attracting residents, investors, and tourists alike,” she added.
The partner continued to underline that destination developments along the Red Sea coast focus on sustainable, low-density communities blending hospitality, nature, and residential living, promoting wellness and eco-tourism.
Menassa noted that secondary cities like Abha and AlUla are emerging as hubs for outdoor living, culture, and heritage, supported by government policies and investments.
These lifestyle-driven districts appeal to residents for livability and job access, and to investors for scale and stability, offering resilience through everyday services and cultural experiences.
From Bain’s side, Jemili explained that Riyadh and Jeddah stand out as the main hubs because they combine jobs, population growth, liquidity and are where “integrated community” formats scale fastest.
“We’re seeing the same in Makkah and Madinah; the focus is shifting from delivering more units to delivering higher-quality development and standards,” he said.
From PwC’s perspective, Shahrouri noted that regions across Saudi Arabia are becoming hubs for lifestyle-driven development, with large-scale regeneration creating sustainable, well-designed environments that enhance urban living and attract global investment.
“Flagship projects are reshaping their surroundings by focusing on the character and feel of place, bringing together community elements, environmental responsibility, and integrated urban design.”
Their growing appeal comes from the balance they strike between modern infrastructure and a human-centered approach to planning, creating destinations where daily life feels more seamless and connected,” he said.
Next phase of Saudi real estate evolution
The next phase of Saudi Arabia’s real estate evolution is likely to be defined by integration, intelligence, and regeneration.
From ADL’s lens, Menassa explained that Riyadh is set to feature highly vertical, dense urban environments designed for land efficiency and sustainability, with fully integrated live-work-play ecosystems that reduce commuting, boost productivity, and enhance social cohesion.
“The real shift, however, is toward AI-enabled and data-driven communities, where energy, mobility, and services are actively managed rather than passively consumed. Real estate will increasingly be judged not by how much is sold, but by how well places perform — in terms of livability, productivity, and environmental outcomes,” she said.
The partner noted that Saudi Arabia is boosting private sector involvement, public-private partnerships, and institutional investments to develop public spaces and social infrastructure. The focus is shifting from just constructing cities to designing lifestyles, using real estate as a key driver for economic growth and social transformation.
Jemili from Bain said: “The next phase is more about operating districts like platforms, digital twins, and real-time data to optimize energy, maintenance, mobility, and resident experience, creating tighter live-work-play loops. Rather than ‘building more.’”
From PwC’s side, Saudi Arabia is building a strong foundation for future cities by focusing on resilient, resource-efficient developments and adaptable infrastructure, paving the way for smart, connected urban models like vertical districts and digital neighborhoods.
“These emerging environments are set to respond more naturally to the needs of their communities. As the quality and experience of urban life continue to rise, our cities are poised to become more intelligent, enriching and future ready, evolving with their residents and reflecting the ambition of a nation transforming at pace,” Shahrouri concluded.
