Timing the Market: Why 2025 Might Be the Right Year to Sell Your Dental Practice
Frye Practice Sales & Healthcare Real Estate
Karl Frye – 480-599-6958 – karl@fryepracticesales.com
As a dental transition broker, one of the most common questions I am asked is:
“Is now a good time to sell my dental practice?”
For 2025, the answer is a resounding YES—and here’s why.
Several current trends are making this year particularly favorable for practice owners considering a sale. From buyer demand to financial market conditions and practice management pressures, the stars may be aligning to help you transition successfully while maximizing your return.
1. Buyer Demand Remains Strong
The demand for established dental practices is at an all-time high. According to the American Dental Association, dental school enrollment has remained strong, with over 6,700 graduates in 2024 alone. At the same time, Dental Support Organizations (DSOs) and private equity groups continue aggressively acquiring practices, especially those with healthy financials and modern infrastructure.
Young dentists, often burdened by over $400,000 in student loan debt, are increasingly choosing to buy rather than build, fueling competition for existing practices. This intense demand continues to drive practice valuations upward, especially in metro areas and desirable suburban locations.
2. Limited Market Inventory
Many dentists delayed retirement during the uncertainty of the pandemic and post-COVID recovery, resulting in a shortage of practices for sale. While some Boomers’ practices are beginning to enter the market, supply still lags behind demand in many regions. This creates a competitive environment for quality listings and strengthens your leverage as a seller.
3. Premium Valuations for High-Performing Practices
We continue to see a divergence in practice valuations:
- Practices grossing $900,000+ annually, with modern technology, attractive locations, and strong hygiene programs, often receive multiple offers from both individual buyers and DSOs.
- Conversely, practices grossing under $400,000, with outdated equipment or declining patient bases, are seeing declining interest and lower valuations.
Buyers are seeking turnkey operations that allow them to generate cash flow from day one. If your practice is performing well and technologically up to date, now is the time to capitalize.
4. Financing Is Still Favorable (But May Not Last)
Despite modest increases, interest rates remain historically low. As of Q1 2025, dental practice loans from major lenders are available in the 5-7% range, with many banks still offering 100% financing plus working capital to qualified buyers.
However, the Fed has signaled that rate hikes prior to the end of 2025 to curb inflation may be possible. Higher interest rates can erode buyer purchasing power and your sale price. Locking in a deal before rate increases may be a wise financial move.
5. Start-Up Costs Are Sky High
Opening a new dental practice now costs an average of $600,000–$800,000, driven by escalating costs for:
- Digital and AI-enhanced dental technology
- Leasehold improvements
- Construction delays and materials pricing
- Marketing and hiring
Many new dentists are opting to buy an established practice rather than navigate the costly and risky process of starting from scratch.
6. Burnout & Management Stress Are Real
Today’s dental landscape demands far more than clinical excellence. Dentists are also responsible for:
- Recruiting and retaining staff amid a national shortage
- Navigating complex insurance plans and declining PPO reimbursements
- Implementing digital marketing strategies
- Managing rising operational costs
Suppose the management side of practice ownership has become burdensome. In that case, a sale to the right buyer or DSO can provide financial freedom and reduced responsibility, with the option to continue working, on your terms, during a transition period.
7. Is a Market Change Coming?
While 2025 is favorable, several headwinds may make future years more challenging for sellers:
- More Listings on the Market: With more Baby Boomers approaching retirement, practice inventory is expected to rise in the next 2–3 years, shifting toward a buyer’s market.
- Rising Interest Rates: Each percentage point increase in rates can significantly impact a buyer’s affordability and limit your sale price.
- Increased Competition from DSOs: While DSOs are buying, they are also competing against private practices, and using robust marketing budgets and recruitment advantages.
- Downward Pressure from PPOs and upward pressure on overhead (technology, payroll, rent) are also making profitability a moving target.
Final Thought: Transition with Strategy and Support
If you're considering retirement or stepping back from the demands of ownership, 2025 may be your window of opportunity to exit at the top of the market. Don’t navigate it alone.
A qualified dental practice broker like FRYE PRACTICE SALES can:
- Evaluate your practice and identify your market positioning
- Confidentially market your practice to ideal-fit buyers
- Guide negotiations and provide due diligence
- Facilitate a smooth closing
- Help you reach your financial and lifestyle goals
Let us help you explore your options while the market is still in your favor.
Visit us www.fryepracticesales.com or call 480-599-6958
Karl Frye
karl@fryepracticesales.com