Luxury Market Continues to Grow

The luxury real estate market continues to demonstrate resilience and steady growth, even amid broader economic uncertainty. According to recent data from Realtor.com and the Federal Reserve, early 2025 has brought notable developments in both property values and sales activity—particularly in the high-end market segment.

A Surge in Luxury Demand

Luxury homes—those priced above $1 million—accounted for 7.5% of all home sales in February 2025, up significantly from 5% in February 2023. This growing share underscores the consistent demand for upscale properties, even as the broader market sees mixed signals.

Interestingly, luxury homes made up 12.8% of active listings in Q1 2025, slightly lower than 13.6% in Q1 2024, suggesting that inventory may be tightening at the top of the market.

Market Performance by Price Point

Homes priced under $1 million are still moving, though at a slower pace. In February, they took an average of 64 days to sell, up from 58 days in 2023. Additionally, 22% of these listings saw price cuts, up from 20% last year.

For homes over $1 million, the average time on market stretched to 75 days, and 13.6% of listings required a price reduction to attract buyers. Still, the luxury segment remains more stable overall and continues to outperform much of the broader market.

Real Estate Wealth on the Rise

The total value of private real estate hit $48.1 trillion in Q4 2024, a 7% increase year over year and nearly double its 2016 value, according to Federal Reserve data. Homeowner equity also surged to $34.7 trillion, an 8.8% gain from the previous year.

While this growth is encouraging, it's worth noting that the top 10% of households captured the majority of these gains—despite real estate only comprising 18.7% of their total financial assets in 2024.

Volatility Meets Value

The start of 2025 saw markets grappling with global tariff shifts and political uncertainty. According to Realtor.com, Q1 marked both a new market high and a noticeable retreat, reflecting investor caution around evolving policy impacts from the Trump administration.

Despite the volatility, the luxury sector held its ground, signaling continued confidence from high-net-worth buyers and a long-term bullish outlook.

Bottom Line:
The luxury real estate market is evolving—but not slowing down. With increased sales share, rising equity, and solid demand, high-end properties continue to be a cornerstone of real estate investment in 2025.

Source:
Gourarie, Chava. “Luxury Market Continues to Grow.” Mansion Global, April 10, 2025. Based on data from Realtor.com and the Federal Reserve.