Real Estate, Bitcoin, and AI: Transforming Financial Planning for 2025

Hello Advisor,

Snowflakes are nature’s tiny masterpieces—delicate, fleeting, and utterly unique. Scientists estimate that no two snowflakes are exactly alike, with each one shaped by the conditions it encounters as it tumbles through the atmosphere. From temperature to wind patterns, every variable leaves its mark, creating an intricate design unlike any other.

Doesn’t that remind you of your clients? Like snowflakes, no two financial journeys are identical. Each client’s needs, aspirations, and challenges are shaped by their own “atmosphere”—their experiences, values, and the economic environment around them. And while snowflakes melt, the strategies you craft can leave a lasting impact.

This December, as we reflect on a year of transformation, we’re diving into tailored solutions that redefine what’s possible in financial advising. From analyzing the real estate market’s evolving landscape to understanding Bitcoin’s role as a modern inflation hedge and showcasing how AI-powered platforms like Leveridge can revolutionize your approach, we’re here to equip you with insights that turn complexity into opportunity.

In today’s email…

• Real Estate in 2025: What Advisors Need to Know

• Bitcoin vs. Real Estate: The Inflation Hedge Debate

• Leveridge in Action: Simplifying Real Estate Planning with AI

Let’s dive in!

Industry Insight: Navigating the Evolving Real Estate Landscape

As 2024 comes to a close, the real estate market continues to show dynamic shifts that will shape the road ahead. Here’s a snapshot of the latest trends:

1. Home Price Forecasts: Modest Growth Ahead

Zillow’s forecast of a 2.9% increase in U.S. home prices from October 2024 to October 2025 reflects a nuanced balancing act in the housing market. Constrained inventory levels are supporting home value appreciation, but growth remains modest due to high mortgage rates, which hover around 7%. This affordability challenge has sidelined some buyers, leading to tempered demand.

Interestingly, while new listings are increasing slightly, they remain far below historical norms. Homeowners with sub-4% mortgage rates are reluctant to sell and re-enter the market, effectively “locking up” inventory. This trend has created regional disparities, where markets with already low inventory—like the Pacific Northwest—are seeing more pronounced price pressures, while regions like the Sunbelt are experiencing slower growth as supply gradually improves.

For financial advisors, understanding these regional dynamics is key to guiding clients looking to invest in real estate. Monitoring market-specific trends can help clients identify where value opportunities might exist.

2. Divergence in Housing Starts: Single-Family vs. Multifamily

The U.S. housing market is witnessing a striking divergence in building activity. According to the latest data, single-family home construction has remained relatively stable, dipping only 0.5% year-over-year. Multifamily construction, however, has dropped by 12.6%, signaling a shift in builder priorities.

This disparity reflects the challenges facing the multifamily sector, including financing hurdles brought on by high interest rates. Meanwhile, the demand for single-family homes remains robust, driven by lifestyle shifts such as remote work and increased desire for homeownership. Builders are prioritizing smaller, family-oriented developments to meet this demand.

These trends also align with shifts in rental dynamics. Multifamily developers are grappling with rising vacancy rates in urban centers, where remote work has reduced demand for city living. In contrast, suburban single-family developments continue to attract buyers seeking space and affordability..

3. Inventory Levels: A Gradual Rebound

After years of historically low housing inventory, signs of recovery are emerging. As of October 2024, more than 54 of the nation’s 200 largest housing markets have inventory levels exceeding pre-pandemic benchmarks. A year ago, that figure was only 17.

This increase is particularly notable in Sunbelt regions, which were highly competitive during the pandemic-driven housing boom. Markets like Austin, Phoenix, and Tampa have seen marked improvements in inventory, helping to stabilize prices. However, many markets remain undersupplied, with inventory constrained by high mortgage rates and the reluctance of current homeowners to sell.

This uneven recovery underscores the importance of understanding market-specific conditions. While some regions are returning to normalcy, others still face significant supply challenges.

4. Housing Affordability: A Central Concern in Recent Elections

Housing affordability has emerged as one of the defining issues of the year, becoming a focal point in recent elections across the U.S. From statewide measures to local initiatives, voters are demanding action to address the affordability crisis.

In Los Angeles County, voters approved a sales tax increase to fund affordable housing projects. Similarly, other cities and states have introduced measures to expand affordable housing, reduce homelessness, and incentivize developers to build lower-cost homes.

These policy shifts reflect growing public recognition of the barriers many face in achieving homeownership or stable housing. As affordability initiatives gain momentum, they could create ripple effects in the market, impacting pricing, supply, and investment opportunities.

Macro Outlook: Bitcoin vs. Real Estate – The Battle for Inflation Hedge Supremacy

In a world where the U.S. dollar continues to face inflationary pressures, two titans of wealth preservation have emerged: real estate, the timeless asset class, and Bitcoin, the digital disruptor. While both offer unique ways to hedge against inflation, their contrasting characteristics—and the perspectives of thought leaders—paint a fascinating picture for the future of wealth management.

Real Estate: The Time-Tested Contender

For centuries, real estate has been the go-to hedge against inflation. Why? Because land and property hold intrinsic value, rising in price as the cost of living increases. Rental income provides an added layer of protection, adjusting upward in inflationary environments.

But, let’s be honest—real estate isn’t perfect. It’s expensive, slow to transact, and tied to physical locations, making it less agile in a rapidly changing economy.

Bitcoin: The Bold Challenger

Enter Bitcoin, a digital asset born in the wake of the 2008 financial crisis. Its fixed supply—capped at 21 million coins—makes it inherently deflationary, a stark contrast to fiat currencies like the U.S. dollar, which can be printed at will. Bitcoin’s decentralized nature offers global accessibility, and its liquidity means it can be traded instantly, anywhere in the world.

But Bitcoin isn’t without its flaws. It’s volatile, with wild price swings that make even the bravest investors pause. And while regulatory clarity has improved, uncertainties still loom.

The Experts Weigh In

• Paul Tudor Jones: The Veteran Investor’s Stamp of Approval
  Paul Tudor Jones, one of Wall Street’s most revered investors, compares Bitcoin to “digital gold.” Concerned about rising U.S. debt and potential inflation spikes, Jones has increasingly allocated to Bitcoin as part of his inflation hedge strategy, calling it a “safe haven in uncertain times.” His endorsement has helped solidify Bitcoin’s reputation among institutional investors.

• Senator Cynthia Lummis: A Vision for Bitcoin’s National Role
  U.S. Senator Cynthia Lummis envisions Bitcoin not just as an individual hedge but as a national asset. Her bold proposal to integrate Bitcoin into the U.S. Treasury as a strategic reserve aims to bolster the dollar’s status as the global reserve currency. Lummis sees Bitcoin as a key to maintaining U.S. economic dominance, describing it as “the financial innovation of our era.”

• Stanley Druckenmiller: Recognizing Bitcoin's Brand Value
  Legendary investor Stanley Druckenmiller, while known for his cautious approach, has highlighted Bitcoin’s growing appeal. He compares Bitcoin to gold, noting that while gold has a 5,000-year-old brand, Bitcoin’s 17 years have firmly established it as a store of value for younger generations. This perspective adds a generational lens to Bitcoin’s expanding role.

• Bill Miller: A Significant Personal Investment in Bitcoin
  Value investing icon Bill Miller has gone a step further, with Bitcoin and related investments comprising over 50% of his personal portfolio. Miller sees Bitcoin as an unparalleled economic entity due to its scarcity and decentralized nature, calling it a critical hedge against inflation and a long-term store of value.

MicroStrategy: Pioneering a Corporate Bitcoin Reserve

If Bitcoin is the digital hedge for individuals, MicroStrategy is its corporate counterpart. The business intelligence firm, led by Michael Saylor, has amassed over 331,200 Bitcoins, making it one of the largest institutional holders. Saylor describes Bitcoin as “a once-in-a-generation asset,” leveraging it as a primary treasury reserve to protect against the devaluation of fiat currencies.

Real Estate vs. Bitcoin: Which Reigns Supreme?

The Takeaway

Real estate and Bitcoin each offer unique advantages in the fight against inflation. Real estate provides stability and income potential, while Bitcoin delivers agility and a cutting-edge hedge against the dollar’s decline. With experts like Paul Tudor Jones, Senator Lummis, Stanley Druckenmiller, and Bill Miller championing Bitcoin’s role in portfolios, the asset class is no longer a fringe idea—it’s a serious contender.

As the financial landscape evolves, one thing is clear: understanding both these assets is essential to navigating an uncertain future.

Closing the Gap in Real Estate Planning

This month, I had the privilege of being featured in Financial Advisor Magazine to discuss a topic close to my heart: the untapped potential of real estate planning in financial advising.

In the Q&A, we explored the key challenges many advisors face with real estate: a lack of confidence in navigating the market, operational complexities, and the misconception that real estate planning is too time-consuming. These hurdles often leave clients making significant property decisions without professional guidance.

But here’s the opportunity—integrating real estate planning into your services can be transformative. Advisors who embrace this approach can differentiate themselves, deepen client trust, and safeguard assets under management. Tools like Leveridge, our AI-powered platform, simplify the process, empowering advisors to provide more holistic and impactful financial planning.

Real estate isn’t just another asset class; it’s tied to life’s biggest milestones and long-term wealth building. Helping clients navigate these decisions strengthens relationships and positions advisors as indispensable partners in their financial journeys.

If you’re curious about how real estate planning can elevate your practice, I encourage you to read the full interview on Financial Advisor Magazine here.

Thank you for being part of our forward-thinking advisor community!