Even as markets muddle through uncertain waters today, high-net-worth clientele remain attracted to luxury real estate as an investment.
But this year, luxury buyers have proven to be more selective and ready to take a hard-line approach to their homebuying goals with an eye on cash deals, according to Coldwell Banker Global Luxury’s 2025 Mid-Year Report released on Wednesday.
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The report analyzed market data from 120 markets in the U.S. and surveyed responses from more than 200 Coldwell Banker Luxury Property Specialists to predict luxury trends over the next six, 12 and 24 months.
Michael Altneu | Coldwell Banker Global Luxury
Out of those Coldwell Banker luxury agents surveyed, 68 percent said their clients are at least maintaining, if not increasing, their exposure to real estate. Many are also opting out of financing at a growing rate, with 51 percent of luxury agents reporting an increase in all-cash transactions.
The findings add up to a luxury real estate market in a period of adjustment, said Coldwell Banker Global Luxury Vice President Michael Altneu.
“So far in 2025, we’re seeing a luxury real estate market that isn’t fully bullish or bearish — but rather recalibrating,” Altneu said in a statement. “Affluent homebuyers still see real estate as a safe haven to grow and protect their wealth, but as the market balances and more inventory comes online, they can also be more choosy than in recent years. Practical considerations including home affordability, tax strategy, estate planning and long-term investment potential are taking precedence over aesthetics, flashy amenities or location. This could market the return of what we call ‘smart luxury’ — a mindset shift where discernment and strategic decision-making take priority.”
Different classes of luxury buyers are responding to market fluctuations in contrasting ways, Altneu added in the firm’s report. The “aspirational affluent” are reacting to financial market volatility by pulling back from real estate while the ultra-wealthy are digging their heels into the most high-end real estate assets, Altneu said, “driven in part by a desire to diversify out of equities and into real estate, which is seen as a safer, more stable asset class.”
Looking at the months ahead, luxury real estate agents can expect wealth strategy, “smart luxury,” move-up buyers, the ultra-wealthy and aspirationally wealthy divide, and cash purchases to increasingly impact the market.
Real estate remains a stable wealth strategy
Despite economic headwinds including high home prices and mortgage rates, a volatile stock market, Trump administration tariffs and more, many luxury buyers remain of the opinion that real estate is a stable investment, Coldwell Banker’s report shows.
Jessica Lautz | NAR Deputy Chief Economist
The nearly 7 in 10 luxury agents who said their clients are either upholding or growing their exposure to real estate shows the level of confidence high-net-worth individuals place on real property as an investment. Nearly 60 percent of luxury agents said they feel somewhat or extremely confident about the health of the market today.
At the opposite end of the spectrum, only about 11 percent of luxury agents said their clients are decreasing their real estate assets in favor of other investments.
“Real estate can be a place to park money, and when the world feels uncertain, we often see an interest in home and real estate purchases,” National Association of Realtors Deputy Chief Economist Jessica Lautz said in the report. “With the recent volatility in the stock market, the affluent may be looking to diversify their assets and invest in real estate since they view it as a more secure asset.”
The ‘smart luxury’ movement
Carla Rayman Kidd | Coldwell Banker
Luxury buyers today are much more keen on buying homes that are completely aligned with their ideal property features or condition — and a lot less willing to compromise on those properties that don’t fall into these categories, Coldwell Banker said in the report.
Those high standards might also be contributing to growing inventory, the report noted. Since 2023, inventory of single-family luxury homes is up 40.4 percent and inventory of attached luxury homes is up 42.6 percent. Rising inventory levels are also serving as a feedback loop of sorts, the report said, with buyers becoming more selective as more inventory becomes available.
Those “smart buyers” that Altneu mentioned are also waiting for a perceived deal.
“Many luxury buyers are trying to get a ‘deal’ on a home that may have been sitting on the market for a longer period of time — trying to take advantage of the current economic conditions of the world,” Coldwell Banker luxury agent Carla Rayman Kidd of Sarasota, Florida, said in the report.
Move-up buyers moving on in
Georgie Smigel | Coldwell Banker
With home prices continuing to climb, homeowners are gaining new levels of equity and graduating into luxury buyers, the luxury report found. The number of million-dollar homes is also increasing as a result. In the last year, almost 300,000 homes sold above the $1 million mark, up from 275,000 homes the previous year, according to data from Realtor.com.
“Prices have increased, forcing move-up buyers to now become luxury homebuyers — especially if they want a newer home,” Georgie Smigel of Coldwell Banker Realty in Cranberry Township, Pennsylvania, said in the report.
For every 1 percent increase in home prices, about $350 billion in home equity is generated, according to NAR data cited in Coldwell Banker’s report. “That means a gain of nearly $1.3 trillion in home value appreciation at a time when the stock market is undergoing a correction,” NAR Chief Economist Lawrence Yun said during NAR’s quarterly Real Estate Forecast Summit in March.
The aspirational and ultra-wealthy buyer divide
Winston Chesterfield | Barton Consulting
While many agents with ultra-luxury buyers (those in the top 5 percent of the market) reported an increase in transactions, those with lower-tier luxury buyers reported more hesitancy as financial market remain in an uncertain place.
Ultra-high-net-worth buyers tend to be “more globally minded, with larger investments exposed to geopolitical shifts,” Barton Consulting founder Winston Chesterfield said. “High-net-worth buyers, on the other hand, are often more focused on immediate, practical concerns — like interest rates, inflation, and taxes. They’re thinking in terms of their own financial world, not the global one.”
However, looking at the data, Coldwell Banker Global Luxury found no significant performance gap between the top 5 percent and top 10 percent of the market during the first five months of 2025 compared to the same period the year prior. “When comparing the top-performing tier to the broader luxury market, differences have been marginal — except in a handful of powerhouse markets,” the report stated, pointing to top-tier sales in Los Angeles, New York City, Miami, Palm Beach and Aspen.
Cash is king
Jade Mills | Coldwell Banker
Luxury buyers are known for their use of cash in transactions to avoid those pesky interest rates that have remained elevated in recent years. And according to Coldwell Banker’s report, that isn’t changing this year.
A massive 96 percent of Coldwell Banker luxury agents reported that buyers are either maintaining or increasing their use of cash purchases.
“Ultra-high-net-worth individuals aren’t just buying one property — they’re building real estate portfolios,” Jade Mills, president of Jade Mills Estates and International Ambassador of the Coldwell Banker Global Luxury program, said in the report. “These buyers are paying all-cash specifically because they want hard assets independent of market swings. When you’re dealing with generational wealth, real estate becomes a cornerstone strategy, not just a lifestyle purchase.”
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