Wealthy U.S. households continue to lead gains in real estate values despite ongoing economic volatility, according to a mid-year report from Sotheby’s International Realty.
The 2025 Mid-Year Luxury Outlook highlights that the luxury housing sector remains a strategic asset for those who are navigating inflation, stock market shifts and global uncertainties while continuing to invest heavily in high-end properties.
“Ultra-high-net-worth individuals continue to view real estate as an essential portfolio component,” said Philip White, president and CEO of Sotheby’s International Realty. “Even amid economic uncertainty, the resilience of the luxury housing market provides compelling opportunities for strategic homebuyers and sellers, and this report serves as a roadmap for navigating today’s complex luxury real estate landscape.”
On-again, off-again tariffs, stock market volatility, stubborn inflation and currency fluctuations are likely to continue to affect global real estate markets in the coming months, says the Sotheby’s report, but they could still present opportunities for some buyers.
“Despite elevated interest rates and slower overall sales activity, the high-end real estate segment continues to show resilience,” says Odeta Kushi, deputy chief economist, First American Financial Corp., a provider of title, settlement and risk solutions for real estate transactions. “Wealthy homebuyers are often motivated by lifestyle, portfolio strategy or long-term bets on a specific market, not just short-term cost considerations. And, while headwinds such as trade tensions or financial market volatility may shift the pace or location of demand, they rarely erase it.”
The upper end of the housing market has consistently performed well in the past few years, attributed in part to strong stock market performance, says Lawrence Yun, chief economist, NAR.
While noting that market dynamics might temporarily slow activity, Yun remains optimistic about luxury real estate’s long-term trajectory. “We’re starting to see a little hesitancy at the upper end, mostly because of the uncertainty about where the stock market will be in a month or next year,” Yun says. “But in the big picture, there’s sizable pent-up demand for trade-up buyers. In addition, even with a stock market correction, there’s plenty of household wealth being transferred to the next generation that will add to the demand for luxury housing.”
Other key findings suggest luxury market activity is gaining traction despite broader financial concerns:
- Inflation data in May 2025 exceeded economist expectations, The New York Times reported in June.
- Sales of homes priced at $10 million and above rose between February 1 and May 1, 2025, compared to the same period last year, according to The Wall Street Journal.
- The upper half of U.S. households by wealth saw the largest real estate appreciation in 2024, Realtor.com reported in April.
- Cash remained the dominant method of luxury home transactions, accounting for 88% of deals, according to the Sotheby’s International Realty agent survey.
- San Francisco’s luxury market is showing renewed strength — with several 2024 transactions exceeding $20 million and surpassing prior records.
- Puerto Rico recorded its highest-ever property sale at $30 million — up from $2 million a decade ago — based on local records.
- Post-disaster markets are attracting affluent buyers looking to rebuild or construct new homes, particularly in areas at risk of climate events. A Wall Street Journal article published in April noted that high-net-worth individuals are “setting home price records when they get there.”
The report draws from internal surveys of agents within the Sotheby’s International Realty network who specialize in transactions priced at $10 million or higher.
Additional data was sourced from financial institutions and market research firms including UBS, J.P. Morgan, Moody’s, McKinsey & Company, Bain & Company, Cotality, the National Association of Realtors, and the National Association of Home Builders.
“The luxury real estate landscape continues to evolve at an unprecedented pace, creating opportunities for homebuyers and sellers with the right market knowledge,” said Bradley Nelson, chief marketing officer of Sotheby’s International Realty.
The full report also explores strategies around financing, impact of natural disasters on property values and identifies luxury markets that are either emerging or re-emerging.
English (US) · 