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Recent positive moves in the luxury market, including lower interest rates, higher inventory and better overall market conditions, have luxury real estate specialists expecting a good run in the new year.
That’s according to Coldwell Banker Global Luxury’s The Trend Report 2025, in which 85.5 percent of Coldwell Banker Global Luxury Property specialists say market conditions are “good” or “fair” for buyers. On the seller side, 74.5 percent of the firm’s luxury agents reported the same positive market conditions.
The annual report by Coldwell Banker Global Luxury was released on Monday and includes insights from the Institute for Luxury Home Marketing, Wealth-X and Barton Consulting LLC, as well as expertise from luxury agents affiliated with the real estate brand.
“This year’s Trend Report focuses on the positive momentum we began to see at the end of 2024, along with some potential disruptors, demographic influences, and trends in wealthy spending aspirations that could further steer the market’s course in 2025,” Michael Altneu, vice president of Global Luxury at Coldwell Banker, said in the report.
“The trends we selected — while offering different perspectives of high-end property buying and selling — all point in the same direction. The luxury segment is expected to remain the shining star of real estate.”
Specifically, Coldwell Banker’s luxury agents expect pent-up demand; “she-elites,” or affluent women; personalized homes; new hot spots; curated new construction trends and more to impact the luxury market in 2025.
Pent-up demand
The Fed’s rate cuts in the second half of 2024, as well as the dust settling on new Realtor regulations, may spur more affluent buyers and sellers to re-enter the market after pausing in 2024, Coldwell Banker’s report said, and create reinvigorated luxury activity in 2025.
A majority of Coldwell Banker Global Luxury agents said market conditions in their area look “good” or “fair” for 2025, with buyers likely seeing improved conditions from 2024 because of lower mortgage rates, which is opening more inventory and providing greater purchasing power to those luxury buyers who opt to finance their home.
Assuming luxury clients are enticed to jump back into the market with increased enthusiasm this year, that pent-up demand could translate into increased competition for desirable properties and push prices up. That said, luxury specialists expect a more balanced market with increased inventory and sales to emerge in 2025.
‘She-elites’ and other quiet forces
Although the focus on emerging luxury clients in recent years has largely been centered on demographics like millennials, Gen Z and High Earners Not Yet Rich or “HENRYs,” the wealth potential of women and members of Gen X is set to make a big impact on real estate in upcoming years, Coldwell Banker’s report noted.
Gen Xers are next in line to inherit wealth from aging parents who are members of the baby boomer and silent generations, and some of those Gen Xers may become first-time luxury homebuyers as their wealth grows, the Trend Report said.
Affluent women are also becoming “the new face of wealth,” according to a McKinsey & Company report cited by Coldwell Banker. Since many women tend to be younger and have longer life expectancies than their male spouses, they too are poised to inherit their husbands’ assets.
By 2030, “American women are expected to control much of the $30 trillion in financial assets that baby boomers will possess — a potential wealth transfer of such magnitude that it approaches the annual GDP of the United States,” a 2020 McKinsey report said.
In addition to their wealth transfer, women are also increasingly becoming the primary breadwinners in their families, with women in tech and finance leading the trend, Coldwell Banker’s report stated.
Men aged 35 to 64 still own 59 percent of luxury homes in the U.S., but millennial and Gen Z single women are making huge gains in luxury homeownership. According to a 2023 study from Luxury Portfolio International, women make up 54 percent of luxury homeowners under 35 years old.
Personalized homes
Luxury homebuyers will continue to veer away from clinical perfection and strive for more personalized home design in 2025, Coldwell Banker said. Rather, the focus will shift to “quality craftsmanship, authentic materials, indoor/outdoor merging and legacy items,” according to The Trend Report.
Warm modernism, flexible layouts, hidden technology and wellness amenities are all part of the trend, as well as spa-like primary bathrooms and lush landscaping.
“Rooted in slow design and quiet luxury principles, this anything-goes mentality is more ‘anti-trend’ than trend,” the report notes.
New hot spots
A number of factors are driving high-net-worths to explore luxury destinations apart from traditional business hubs like London, Paris and New York, Coldwell Banker Global Luxury’s report notes.
Lower taxes, economic opportunity, safety and freedom, lifestyle and culture, climate, and value are all desirable features drawing luxury homebuyers to new locales. Attractive tax policies and reforms are making some luxury buyers look to Florida, Texas, Dubai, Singapore, Indonesia, Malaysia and Portugal as attractive investment options. Meanwhile, economic opportunity in growing Asia-Pacific and Middle Eastern markets are drawing buyers to those areas of the world.
Melbourne, Lisbon and Miami have emerged as draws for cultural experiences, and the latter two, for pleasant climates as well.
Trends in new construction
Developers have been stepping up their game for luxury homes to meet buyer demand, and that trend only stands to continue in 2025, The Trend Report said.
“Moving beyond mass-market appeal, these innovators are focusing on high-end condo and boutique residential projects and lifestyle-centric spec homes that cater to specific affluent buyer segments and their expanding list of desires,” the report stated.
From top-of-the-line amenities in condos to eco-friendly innovations, climate-proofing, and highlighting and restoring original features in old properties, developers are pulling out all the stops to create customized luxury living experiences.
“The developers who may be most successful this year are the ones who are pursuing a curated approach, tailoring their new construction projects to specific buyer segments,” according to The Trend Report.
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