Luxury Housing Market Hits Wall as Wealthy Buyers Pull Back

The once-impenetrable national luxury housing market is showing fractures.

Sales of high-end homes slipped 0.7 percent year-over-year nationwide in the three months ending Aug. 31, the Wall Street Journal reported, hitting the lowest level for the period since Redfin began tracking the segment in 2013. The brokerage’s data also show price growth losing steam: the median sale price for luxury properties rose 3.9 percent year-over-year to $1.25 million, down from a 6.1 percent jump a year earlier.

The slowdown comes as economic uncertainty rattles wealthy buyers who, until recently, seemed insulated from rate hikes.

“The luxury market seems to be weaker than the rest of the housing market right now — which is already pretty weak,” Redfin’s Chen Zhao told the publication; non-luxury sales fell 0.6 percent over the same period.

Market jitters followed April’s tariff announcement, which roiled household wealth and chilled discretionary purchases. Compass analyst Patrick Carlisle said the volatility “injected a substantial hesitancy to make large financial decisions,” noting Bay Area sales above $5 million in August plunged 13 percent from last year.

Inventory, meanwhile, is piling up. Luxury listings rose 9.5 percent year-over-year during the summer months to their highest level for the timeframe since 2020, Redfin found. Nonluxury listings climbed even faster, up 13.4 percent.

Agents said sellers who sat tight during the pandemic are returning to the market — some out of necessity, others looking to cash out.

Regional splits are stark. Indianapolis and Fort Worth are bucking the national trend, seeing luxury sales up 19 and 14 percent, respectively, thanks to strong local demand. In Miami, however, scarce inventory has pushed prices higher while throttling volume: sales fell 19.4 percent even as the median luxury sale price rose nearly 10 percent to $4.2 million.

Agents say today’s buyers remain active but increasingly selective.

They’re not rate sensitive, “but they’re also not willing to overpay,” said Dallas broker Kim Bedwell, who recently sold a 13,600-square-foot Westlake estate after the seller cut the ask by $1.5 million.

With the Federal Reserve easing rates in September, brokers expect more deal flow this fall. In Fort Worth, for instance, Compass agent John Zimmerman said a $5 million spec house received a full-price offer in days as buyers scrambled ahead of anticipated price pressure.

— Holden Walter-Warner