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Zillow has made its much-anticipated prediction for the hottest housing market of 2025. It's Buffalo, New York. That might raise a few eyebrows – as the snowy New York City on the Canadian border experienced years of unemployment and urban dereliction barely a decade ago. However, this marks the second year in a row that Buffalo has taken Zillow's top honor. So what gives?

Affordability And Jobs

Affordability is the root of Buffalo's ascendancy, backed by a deluge of new jobs, which means the once unglamorous industrial city is attracting hordes of new residents. As Zillow explains:

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"Buffalo has the most new jobs per new home permitted." New jobs and owner-occupied homes have allowed Buffalo to finally shake off its image as a desolate urban wasteland lacking in jobs and culture. According to the NAIOP Commercial Real Estate Development Association, from 2018-2023, an estimated $22.6 billion of development was launched within the eight counties in the Buffalo Niagara region. New investment in medical, manufacturing and a clean energy cluster expansion caused increased numbers of residential real estate, hotels, industrial plants and food processing facilities.

Incentives And Revitalization

Buffalo's renaissance began in 2012 when – according to The New York Times–New York's then-governor andrew M. Cuomo, pledged $1 billion in grants and tax credits as part of a revitalization effort. The residential boom has developed new apartments in empty warehouses, former municipal buildings and longtime parking lots.

See Also: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.

Tesla's Bold Ambition

Not every investment turned out the way New York would have hoped. According to the Wall Street Journal, the state spent nearly $1 billion on Elon Musk's ambitious plan to house the largest solar-panel factory in the Western Hemisphere – a quarter-mile-long facility with 1.2 million square feet of industrial space turning out enough solar-panel shingles to cover 1,000 roofs each week. It never happened. By 2023, they were averaging 21 installations per week. The state now owns the industrial space and leases it to Tesla. However, the $240 million worth of solar panel manufacturing equipment the state bought was sold at a discount or scrapped. A state comptroller's audit found just 54 cents of economic benefit for every subsidy dollar spent on the factory.