Dallas-Fort Worth and Houston are the nation's No. 1 and No. 3 markets when it comes to future CRE prospects, according to a much-anticipated annual ranking of the most promising U.S. real estate markets.

The Metroplex took the top spot in an annual survey conducted by the Urban Land Institute as part of its 2025 Emerging Trends in Real Estate report, up from No. 3 last year. Houston, ranked No. 11 last year, jumped eight spots to land in third place, after No. 2 Miami and ahead of No. 4 Tampa-St. Petersburg, Florida, and No. 5 Nashville.

Austin and San Antonio, meanwhile, fell out of ULI's top 10 altogether. The once-red-hot state capital slipped from fifth last year to No. 15, while San Antonio dropped from eighth last year to 15th in 2025.

Study authors said this year's results were more volatile than in years past, with seven of last year's top 20 markets falling off that list. But Sun Belt cities remained a dominant force on ULI's 2025 list because “geography matters more than ever,” an industry academic and adviser told ULI.

“A net of two Sun Belt markets fell from the leaderboard, the first decline since the pandemic,” ULI analysts wrote in their report, published in partnership with PricewaterhouseCoopers. “Sun Belt markets are hardly out of favor and still account for 13 of the top 20-rated markets. However, it should be noted that just two states — Texas and Florida — are home to eight of those 13, including all of the top four.”

Despite the average score declining a touch, all four major Texas markets placed in the top 20.

DFW’s No. 1 spot was secured by its size and demographic growth, which have made it a haven for real estate investors, the report says. And new residents and businesses are expected to continue arriving, thanks to the metro’s affordability and economic diversity.

“Though climate risk in the form of heat stress and fire may challenge the MSA in the coming years, DFW’s demographics offer it a strong engine of growth that may yet underpin a robust recovery and favorable returns for many more years,” ULI analysts wrote.

Houston leapfrogged into the top 10 for the first time in a decade after investors and corporations transformed the city into an international economic hub, the report says.

“The metro area’s existing energy infrastructure and dominant port system position it to be a leader in the nation’s transition to green energy,” ULI analysts wrote of Houston. “Additionally, its unique lack of formal zoning laws makes for a particularly development-friendly environment. These key benefits, along with the area’s strong trends should continue to attract investment.”

In addition to placing first for overall real estate prospects, DFW was No. 4 for homebuilding prospects, which was again ahead of Houston at No. 7.

Tampa-St. Petersburg topped the homebuilding prospects ranking, followed by Fort Lauderdale, Florida, and California's Inland Empire.