Luxury Housing Market Outpaces General Market

With high-net-worth buyers in a better position to ride out this year’s market shifts, prime properties have led in both sales and price growth in major markets around the world.

“Even though overall home sales have slowed during 2024, the luxury market is growing on an annual basis,” says Hannah Jones, Economist at Realtor.com.

In the U.S., while home sales overall fell 12.9% year over year in the first half of 2024, home sales over $1 million increased 5.2%, according to Realtor.com data. The luxury segment outperformed the overall housing market in terms of price as well, year to date. The median home sales price was up 5% year over year in the first half of the year, while the luxury sales price—meaning homes in the 95th percentile— grew 14.2% in the same time period.

Luxury homes tend to spend more time on the market than the typical U.S. home. However, the gap between overall and luxury time on market is the smallest in the past four years year to date as the overall housing market slows and the luxury market retains strength. In the first eight months of 2024, luxury homes spent an average 25 more days on market than the typical U.S. home, down from 28 days one year prior.

CHALLENGES AHEAD FOR THE LUXURY MARKET IN 2025

Despite these rosier economic conditions for high-net-worth individuals, some uncertainty remains around how geopolitics could impact luxury real estate going into 2025.

“While the impacts of a prolonged period of monetary tightening take effect and inflation continues to decline across major economies, it does so against a backdrop of political uncertainty with more than 70 global elections in 2024,” O’Shea says.

As housing affordability remains a top concern among politicians across the globe, policies scrutinizing wealth and increasing regulations on property could influence luxury markets.

Uncertainty stemming from the political results can potentially bolster other global capitals. The results of the U.S. election could give a boost to London, O’Shea says, lending them a “safe haven” status.