While the U.S. housing market was relatively slow in 2024, experts say the luxury sector was an outlier and they are anticipating even stronger conditions in 2025.
According to The Trend Report released Monday by Coldwell Banker’s Global Luxury program, the brand’s luxury property specialists expect more luxury buyers to reenter the market in 2025. Overall, the agents surveyed have a positive outlook for the year, driven by renewed confidence in the market, a larger selection of desirable properties and more purchasing power.
The report was developed by Coldwell Banker Global Luxury in collaboration with the Institute for Luxury Home Marketing, Wealth-X and Barton Consulting, and it defines luxury properties as those priced among the top 10% of a given housing market.
On the buy side, 85.5% of agents surveyed said they would rate buyer market conditions in 2025 as either “fair” or “good.“ On the sell side, 74.5% of respondents report a positive outlook for 2025.
Driving this optimism, especially on the buy side, is the uptick in inventory. According to the report, as of late October 2024, inventory for luxury single-family homes was up 14.4% year over year. Additionally, if mortgage rates continue to decline, experts anticipate inventory levels to rise further in 2025.
The report also found that home-price growth for single-family luxury properties jumped by 7.6% in 2024, compared to 3% for the rest of the market, bolstering the outlook for 2025. But luxury buyers are still, on average, getting their properties for slightly below asking price, with the sale-to-list-price ratio for single-family luxury homes coming in at 97.9% in 2024.
Surveyed agents also reported that they are anticipating an uptick in first-time luxury buyers, with 47.9% of respondents reporting an increase in first-time luxury buyers entering their markets. In recent years, many of these buyers include members of Generation X. Luxury homeownership among Gen X rose 10% between 2014 and 2024, more than any other age group, according to data from Wealth-X.
Additionally, as of 2023, 53.4% of high net worth homebuyers are members of Gen X, according to a 2023 study from the Federal Reserve. But baby boomers still hold more than 50% of the luxury homeownership market share.
Coldwell Banker luxury specialists report that Gen X buyers are prioritizing location and turnkey properties in their home searches. They are also interested in properties that offer access to experiences, such as walkability to cultural hubs and scenic views.
Across generations, luxury buyers are prioritizing indoor/outdoor living, with more than 60% of surveyed agents ranking indoor/outdoor living as one of the most popular luxury design features among their clients. This is up 10 percentage points compared to a year ago.
Many luxury buyers are also interested in multigenerational living. According to the report, 45% of agents surveyed say that flexible layouts were a top design feature among their clients. Desirable features include first-floor in-law suites, lofts or alcoves, open floor plans and extended family spaces, as well as accessory dwelling units (ADUs).
Other popular design features, according to Coldwell Banker luxury specialists, are minimalist aesthetics (39.2%), unique architectural details and statement elements (21.9%), and sustainable/eco-friendly designs (20.8%).
While Gen X might be making moves in generational trends, women are also emerging as more frequent luxury buyers, bucking trends from previous generations. Women with a net worth of at least $5 million now own about 15% of luxury real estate in the U.S., according to data from Wealth-X. Additionally, 95% of affluent buyers reported that whether married or single, women either share the decision making or take the lead when buying luxury properties.
Although typical destinations for second homes and luxury properties — such as New York and London — remain popular, many high net worth individuals are now bypassing these cities for places like Miami, Dubai, Singapore, Melbourne and Lisbon.
Data from Coldwell Banker and Barton Consulting shows that buyers are drawn to these cities for a variety of reasons including lower taxes, more desirable climates, economic opportunities and lifestyle preferences. Domestically (in addition to Miami), Austin, Houston and Scottsdale, Arizona, are becoming increasingly popular for luxury buyers as they provide better value than other destinations.
When it comes specifically to lakefront living, Alabama-based Lake Homes Realty is also expecting a strong market in 2025. In a report published on Tuesday, the brokerage said it expects to see a year-over-year increase of at least 15% in transactions in 2025. The company attributes this optimism to the continued strong level of demand and more owners being better prepared to sell, after many markets were plagued by overpricing in 2024.
So far in the 2024-2025 winter season, Lake Homes Realty reported that Lake Norman, North Carolina, leads the markets where buyers have the greatest selection of properties. It is followed by Puget Sound, Washington; Lake Tahoe, Nevada; Lake Washington, Washington; and Lake Michigan, Illinois.
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