Inman News
Luxury property is outperforming other residential sectors, as its appeal as a safe haven for wealth endures
Despite the geopolitical and economic disruption of early 2025, there is optimism in the luxury real estate sector. This is a key takeaway from the Sotheby’s International Realty brand’s newly published 2025 Mid-Year Luxury Outlook report.
Luxury home purchases significantly outperformed other residential property sectors in 2024 and early 2025 — and the appeal of luxury property as a safe haven for wealth endures.
“High-net-worth buyers remain actively engaged, particularly in the ultra-luxury real estate segment, where unique properties continue to command premium prices,” says Philip White, president and CEO of Sotheby’s International Realty.
A wealth of insight is available in the report, but here are some positive takeaways for agents and their clients.
1. Luxury purchases outperform other market sectors
U.S. property sales in the $1 million-plus category were the fastest-growing sales segment for 21 consecutive months as of Feb. 2025, according to a Realtor.com report on the high-end housing market.
That trend was matched by U.S. sales volume growth of 9.4 percent in 2024 for the Sotheby’s International Realty brand, outpacing the 5.2% overall market growth reported by NAR.
Between Feb. 1 and May 1, 2025, sales of U.S. properties at $10 million and above surged compared to the same period in 2024, according to May 2025 analysis in The Wall Street Journal — in Florida, sales in that price category were up 50 percent in Palm Beach and 48 percent in Miami
2. Low luxury inventory pushes prices up
While inventory is growing in some areas, an inventory shortage of luxury homes is anticipated to continue to push prices higher, increasing the value of property portfolios. In Aspen, Colorado, for example, the median sale price for a single-family home was $13.4 million in 2024, compared to $9.97 million in 2020.
Bidding wars are common for properties from $2 million to $10 million and above in New York City. Even in San Francisco, which experienced a downturn in its luxury real estate market in recent years, inventory for prime properties is limited, which keeps prices steady.
3. High-net-worth individuals remain confident
Stock market gains in 2024 — when the S&P 500 rose 23 percent — boosted the willingness of affluent people to spend some of their profits on real estate.
In 2025, a volatile stock market dropped in April from its record high in February, then recovered by mid-May, erasing losses and coming within 4.2 percent of its high point, as reported by The Associated Press in May. That volatility is anticipated to increase demand for solid real estate investments.
The financial strength of wealthy households is also evident. In 2024, the top 10 percent of U.S. households — those with an income of $250,000 or more — accounted for approximately 50 percent of all consumer spending, according to a February 2025 report in The Wall Street Journal.
4. Cross-border transactions continue to thrive
While a stronger dollar in 2024 made U.S. purchases more costly for foreign buyers, the weakening dollar may pull in more investors looking for attractive opportunities.
According to a June report by Realtor.com, searches for U.S. property by international buyers increased during the first quarter of 2025. Meanwhile, U.S. buyers continue to purchase homes in markets such as Italy, Portugal, France, Spain and the U.K., as well as in countries offering fiscal tax benefits such as Dubai, Malta and Switzerland.
Find out more in the Sotheby’s International Realty 2025 Mid-Year Luxury Outlook report