6 An Eye on t he Market
Luxury property outperformed n early 2025 and may prov de opportun t es for savvy buyers
and sel ers
17 Financing Opt ions
Many wea thy homebuyers prefer to pay cash for properties; however, extra- ow interest rates for h gh-networth nd vidua s may prove appeal ng
24 St eady Course
Whi e tariff tensions and stock market fluc uat ons could temporar y slow down sa es, real estate of ers luxury buyers a ang b e, secure asset
Bespoke
Sotheby?s International Realty Ch ef Marketing Officer
A. Bradley Nelson introduces the 2025 Mid-Year Luxury OutlookSM report
As the Sotheby?s Internationa Realty brand releases ts 2025 M d-Year Luxury Ou lookSM report, we ook ahead to the trends and developmen s affect ng the global luxury real es ate market
Luxury rea estate outperformed trad t ona real estate markets throughout 2024 and in the early months of 2025 The top ha f of the wea thiest househo ds n the U S saw the greatest gains in rea estate va ue, according to an Apr 2025 report from Realtor com® Upsca e property transac ions s owed slightly in response to g obal economic d sruption n spr ng 2025 Stil there?s optimism that the luxury rea esta e market wi withstand financ al vo at ity as a perenn al safe haven
Econom c uncerta n ies? especial y stock market volatil ty? can create opportunities For some people, this cou d be the momen they can catch a break in the storm o competition from other buyers, compared to ust a ew months ago
The 2025 Mid-Year Luxury Out ook report high ights fac ors that nf uence the enduring mpor ance of real estate as an asset c ass tha contr butes to the wealth of ultra-h gh-net-wor h nd vidua s as part of a d versified portfol o Con inued strong nventory in the upper end of the resident al property sector, demograph cs that dr ve demand, and the res lience of the globa hous ng market prov de momentum even in the ace of economic headwinds
This report ncludes insights from Sotheby?s Internationa Realty affil ated agents rom around the g obe, who spec al ze in transactions in the US$10 m ll on and up pr ce category, along w th data and ana ys s from UBS, J P Morgan, Moody?s, McKinsey and Company, Ba n and Company, Co a ty (former y CoreLogic), the Nationa Assoc at on of REALTORS®and he Na iona Assoc at on of Home Bu ders®
The content n the report incorporates ins ghts into financ ng opt ons for luxury buyers and dives nto insurance needs of high-ne -worth ndiv duals for their homes and other assets, such as art and jewe ry The report a so looks at paths to recovery for property markets after a natura
THERE?S OPTIMISM THAT THE LUXURY REAL ESTATE MARKET W ILL W ITHSTAND FINANCIAL VOLATILITY AS A PERENNIAL
A BRADLEY NELSON chief marketingofficer Sotheby?s nternational Realty
d saster, such as the Los Angeles wildfires and earthquakes n Southeast As a, as we l as how homeowners nav gate the decis on to rebu d or re ocate Fina ly the report turns a sharp eye on five key markets w th an emerging? or reemerg ng? uxury res dent al component: San Franc sco, Californ a; Salt Lake C ty, Utah; Puerto Rico; Saud Arabia; and India Each prof le features nforma ion abou what?s driving the h gh-end property market n these ocat ons, inc uding new deve opments, growth n the high-end hous ng market and an appet te for luxury
Globa demand for uxury property s un ke y to slow, given that rea esta e s an nvestment that you can ac ua y en oy wh e you own That demand can be
found among a diversity of family structures that acqu re uxury property
Se lers can consider enhanc ng their home?s appeal o homebuyers by nvest gat ng ocal regu ations to see if a gues house can be added to increase versat lity n l ving arrangements or accommodate a mult generationa fami y compound
Investors seeking stabil ty, whether n their own country or another, may be l ke y to consider rea estate in the com ng year n response to stock market volat lity In add tion, currency f uctuations which led to a surge of Amer cans buy ng property
n the U K in 2024, w ll likely cont nue to drive cross-border purchasing
On the supply s de, he Sotheby?s International Rea ty brand ant cipates
growth a the upper end of the market rom both new construct on and ex sting propert es We saw an unprecedented evel of transactions n 2020 and 2021 when some peop e were forced to make renz ed decis ons As we come up to the ve-year mark after those purchases, and as th ngs beg n to normalize aga n, we ant c pa e a rea ignment n prior t es hat cou d tr gger more sa es S mu taneously, new deve opment s redefining uxury n some unexpected p aces L festyle-or ented markets cont nue to attrac new upscale deve opment and both ocal and out-o -state buyers
Read on to earn morevaluab e ns ghts from the 2025 M d-Year Luxury Outlook report -
The enduring v ew of rea estate as a stable nvestment s an icipated to con r bu e to its cont nued appeal n 2025,w th opportunities n g obal uxury property markets pers sting desp e ongoing concerns about tariff mpacts and inflation Data released by the Bureau of Labor Statist cs beat econom sts expec ations accord ng to a June 2025 report in The New York Times a though ant cipation is grow ng that consumer pr ce ncreases could peak in the four h quarter of 2025 f ar f s remain n p ace
?The luxury rea estate market saw a strong n sh in 2024,meeting and even surpassing expectat ons n several areas,?says Ph l p A Wh te Jr pres dent and CEO, Sotheby?s Internationa Rea y ?The Sotheby?s Internat onal Rea y brand?s U S sa es volume growth ou paced the broader market n 2024,achieving 9 4%, compared to he ndustry?s 5 2% overal market growth reported by the Nationa Association of REALTORS®(NAR)?
Luxury property purchases in 2024 and early in 2025 outperformed the rest of the market because of the
con inued appea of own ng hard asse s and he abil ty of upper bracke buyers to pay cash rather than borrow at h gher nterest rates, White says Gobally,the So heby?s Internationa Rea ty brand ach eved US$157 bi lion in 2024
sales vo ume marking one of ts best years ever, and ts g obal referra network generated US$4 6 bil ion
?These numbers demonstrate the appeal of luxury rea estate as an nvestmen ? something our d scerning c ients understand wel as they cont nue to seek except onal properties that of er both l festy e benef ts and rel able portfol o diversificat on across mu t p e countr es and marke s,?Wh te says ?Our performance reflec s the strength of the brand?s unparalle ed g obal network,the expertise of our affi ated agents and our conic brand posit oning, al of wh ch prov de c ients w th greater access to properties, prospects and market insights? key different ators hat have enabled us to not just respond to the uxury real es ate andscape but act ve y help shape it ?
Sa es of propert es at US$10 mi ion and above soared between February 1and May 1, 2025,compared to that
same per od in 2024,accord ng to analysis publ shed in May 2025 by The Wal Street Journal Sales were up 50% in Palm Beach, F orida; 48% n Miami,F orida; 44% n Aspen, Colorado; 33% in Bever y H l s,Ca fornia; 29% n Los Ange es, Ca iforn a; and 21% in Manhattan, New York according o the report
The streng h of sa es in the 2024 uxury rea estate market cont nued n some markets n 2025,White says, with propert es that were priced correctly sel ng qu ck y The assurances felt around the luxury real estate market stems from two main themes First,a vo at le globa e ect on year is over, removing some elements of uncerta nty for wealthy individuals Second, wh le inventory is grow ng n some areas an inventory shortage of luxury homes is antic pated to continue o push pr ces higher, increas ng the value of property portfo ios
In the U S ,the top half of the wea hiest households saw the biggest gains n real estate value among all homeowners n 2024 according to an Apr l 2025 report by Realtor com® Sales of US$1-mi lion-plus propert es
The US$1-m on-p us market, n numbers
Source: Rea tor com®
18.7% o to al asse s or the top 10% weal h est househo ds in 2024 were n rea esta e
7.6% o a exis ng home sa es n the U S n February 2025 were US$1-m l on-p us proper es
made up 76% of al exist ng homesales n the U S n February 2025 compared to 5% in 2023 But among the 10% wea th est househo ds,rea estaterepresented 18 7% of their otal assets in ate2024, down from 19 9% two years earl er,desp te ga ns n value In late2024, 36 3% of the asse s among thisgroup of househo ds comprised corporate equ tiesand mutual fund shares,the highest share ever recorded However,recent stock market vo at lity is ke y to havedropped that share back to one-third, simi arto the end of 2023
The Realtor com®report a so foundthat in ear y 2025 there werefewer propertiespr ced over US$1m l on being listed for sa ebut demand or expens ve homes rema ned h gh w ththose homes se ing faster than med an-priced ones Price cuts in he f rst few months of 2025 were morecommon for ower-priced homes, rising o 22 6%,whi e h gh-end properties s ayed more stable w thonly as ght ncrease from 13% to 13 6%
The report also noted that vo at ity n thestock market and geopo it cscould dr ve uxury homesales ?
h gher: ?Whi e 2025 started of strong, with bul sh predictions and record h ghs,markets grappled w th on-then-off-again ar f s and uncer a n y over he impact of the current po icy decis ons Moves ke deregulation and po entia tax cuts could help the economy and markets,but the unpred ctab lity is push ng some wea thy nvestors toward rea estate wh ch fee s safer than stocks?according o he report
Some of those potentia investors may face competition when seek ng new properties Wh e one factor contr but ng to the lack of supply n the overal hous ng market is that not enough new homes have been bu lt in the past decade,another s interest rates,accord ng to research published n February 2025 by J P Morgan S nce mor gage rates began to r se in March 2022,homeowners w th a mortgage rate under 4% are cont nuing o stay pu for longer to avoid the need o borrow at a h gher rate for the r next home,so hous ng stock at all leve s is not becoming ava able to other buyers
Interest rates remaining at higher levels for onger per ods have a so contributed to antic pated further pr ce ncreases g obal y at al price po nts,according to research publ shed by the nvestment bank UBS in September 2024 ?Un ntentiona ly,centra banks have la d the
foundations for the next pr ce boom,?noted the UBS 2024
Gobal Rea Estate Bubble Index report ?S nce the sharp r se in interest rates thwarted the p ans of many real estate deve opers,new construct on has [dec ned] in many c t es and looks set to exacerbate the housing shor age, hereby eading to upward price pressure in the future?
Mult ple factors influence the performance of uxury rea esta e marke s One of the most mportant s he conf dence of high-net-wor h ndiv duals (HNWIs)
Sign f cant U S s ock market ga ns? with the S&P 500 up 23% in 2024? boosted the w l ngness of aff uent peop e to spend some of those profits on rea asse s such as property The cont nued financ al wel -be ng of HNWIs extends beyond real estate: n 2024 the top 10% of U.S. households? those with an income of US$250,000 or more? accounted for approximately 50% of all consumer spending,accord ng to a February 2025 artic e n The Wa l Street Journal citing data from U S financia serv ces company Moody?s The stock market f uctuated as the U S mposed and paused g obal tar ffs,and concerns continued around n at on and a potent ally sof er economy The S&P 500 dropped 12 71% in m d-April 2025 from its record h gh n February 2025,although it had recovered by m d-May 2025,erasing those osses and coming w th n 4 2% of its h gh point, according to a report by AP News n May
in more than wo years Also n March 2025, Sy t Sotheby?s Internat onal Realty l sted a cast eset among 185 acres on Germany?sBalt c coast or US$201m l on
EVERYTHING IN THE ECONOMY ISUNCERTAIN AT THE MOMENT, BUT IN THE HIGH-INCOME WORLD,THAT TRANSLATESTO OPPORTUNITIES
The gap in performance between he regu ar and uxury hous ng markets s ant cipated to cont nue n 2025 am d headwinds caused by chang ng pol ical and econom c dynamics ?Everything n the economy s uncer a n at the moment, but n the high-income wor d, that trans ates to opportun ties,?says Selma Hepp,chie economist, Cotality a property data analytics firm ?Many of the policy changes prom sed by the new admin stration n the U S ? such as tax cuts? are advantageous to HNWIs In add tion,wea th er househo ds have more resources and are ess concerned abou nf at on and unemp oyment No one is immune to uncertainty,but it?s less of a concern for HNWIs because hey have nvestments?
Since Nikki Fie d, g obalrea estateadv sor, Sotheby?s Internat onal Realty - East Side Manhattan Brokerage, and her team took over sa es at 111West 57th St in m d-2024,theyhave accelerated momentum a theiconic tower The team l sted he ta est ?Quadp ex?penthouse in the U S ? soar ngover Bil iona re?s Row at morethan 1,000 feet nthe a r, witha lofty price to match US$110 m ll on? andhad done over US$285 mi lion in sa es (covering bo hc os ngs and contractssigned) As o May 2025,the team had s gned 10 contractsand announced that the bu ding s 81% so d inc ud ng a recent closing of Penthouse72 for US$46 9 m l on
The Sotheby?sInternationa Realty brand?s experienceshows that we -posit oned luxury propert es cont nue to attract buyers, espec al y those of ering distinc ive amenit es,pr vacy and festy e benef ts that al gn with evolving luxury pre erences headds ?Whi e geopol t csmay introduce uncer a n y,grow ng ? U
This buffer means that act vity n the uxury real es ate market s an icipated to con inue at its current pace, w h new luxury list ngs coming to marke at notable price points For examp e,in March 2025,the former home of singer B ng Crosby n Lower North H lsborough, Cal fornia, was sted by Go den Gate Sotheby?s Internat onal Realty and was quickly so d by June 2025 for US$25 m l on, marking the highest sale in he reg on
?High-net-wor h buyers remain active y engaged, particu arly n the u ra- uxury rea es ate segment, where uniquepropert es cont nue o command premium prices,?White says
The top concerns for homebuyers n 2025
Source: 2025 M d-Year So heby?s Inte nationa Real y agent survey
37.2%
inventory and pent-up buyer demand signa pos t ve market condit ons Our experience te s us that inves ment portfo io performance plays into the f nanc al decisions of uxury property buyers?
Wh te adds ?However, if a dea pops up that ts the r needs, they w ll likely act on it,regardless of other factors.For example n March 2025, Dubai Sotheby?s Internat onal Realty achieved a record sale for a v l a on Dubai?s upmarket Jume rah Bay Is and of US$90 mi lion,break ng its own record? a US$65 5 mi ion sa e n 2024?
Italy?s most expensive res dent al real estate sa e n h story? a 28-bedroom seafron vi a n Sardin a with two pr vate beaches, three poo s and two piers? sold for US$172 8 mil ion n March 2025,with both the buyer and the seller represented by a y Sotheby?s International Rea ty
?HNW s tend o fo low the stock market and f nanc al indicators more closely than the other actors,?White says ?However,we?re see ng a susta ned pa tern where cash buyers remain part cularly active n the market, cont nuing to engage n s gnificant transact ons regardless of other factors Th s cash buyer resi ence has become a defining character st c of the luxury segment,cons stent y driving demand and transaction vo ume even as other market segments experience more volati ty?
Despite he buoyancy of the luxury property marke , the 2025 Mid-Year So heby?s Internationa Realty agent survey revea ed that the op concerns or homebuyers th s year are inflation and interest rates Other ssues that may influence their real estate decis ons inc ude the g obal political situat on,climate change and tax reforms.
Some observershave been concerned tha tar ffs and mmigrat onpol cies cou d harm the U S rea estate market (see p24),with ana ysis rom The New York T mes est mat ng nApri 2025 that,if ful y enforced, ar ffs and mit ng mmigrat on wou d add 16% to labor costs and 31% to materia scos s for homes Of course, that est mate may changedepend ng on thespec f c tariffs and how long they last, a ong w thimm gra ion enforcement polic es ?Tariffson bui d ng mater als and other items used to bui d and furnishhomes raise the cost of cons ruc ion, remodel ngand even moving,?says Robert Dietz chie economist,Nationa Association of HomeBu lders (NAHB) ?NAHB est mates ind cate hat the in ia rounds of the ar f swould raise the cost of construction by up to US$10,000 for a typical s ng e-fam ly proper y and even more for h gh-endhomes?Tariffs on construction mater als a so ncrease thecost of rebu lding homes, which u timately w l raise nsurancecosts or homeowners,D etz says ?But in imes of uncerta nty, rea es ate becomes even more important as an asset,?Hepp says Whi e she doesn? t antic patetar ffs having as big an impac on uxury real es ateas has been suggested,she does think there may bea sp ke n pr ces for some uxury mater als as h gh-endhomes destroyed by w ldfires n Ca ifornia and f oods in North Caro inaand F orida are rebu lt (see p26 for more abou the impact of natural d sasters on homebuyers) ?
As de from po icy changes,generat onal trends among buyers and sellers demonstrate the ncreas ng mpor ance of equity among purchasers,accord ng to NAR?s 2025 Home Buyers and Se lers Generationa Trends report Gen Xers (born between 1965 and 1980) had the h ghestearning homebuyers,with a median income of US$130,000 n 2023,and they purchased he largest homes, along with younger mil ennia s (born between 1990 and 1996) a a med an of 2,000 square feet These younger generat ons a so had the most diverse fam y structures,w th Gen X
buyers the most ikely to purchase a multi-generat onal home at 21%,and younger m l ennia s hav ng the highest share of unmarr ed coup es buy ng homes at 13%
Se lers hop ng to appeal to these demographics need to know how to high ight the flexibi ity of he r propert es ?Gen Xers are today?s sandw ch generation,?says Jess ca Lautz,NARdeputy chief economist and v ce president of research,about he report?s find ngs ?They are purchas ng multigenerationa homes to accommodate ag ng relatives,children over the age of 18 and even for cost sav ngs While Gen X are purchas ng at the h ghes household ncomes, they may stil fee the squeeze as they aim to find a home that serves everyone?
The f rs two months o 2025 were among the busiest starts to the year seen n the New York C ty uxury property market in the pas 20 years, says Jul ette R Janssens, g obal rea estate adv sor,Sotheby?s Internationa RealtyEast S de Manhattan Brokerage ?We saw momentum p ck up after the e ect on due to pent up demand and increased iquidity from previous stock market performance,?says All son B Koffman,g obal real estate advisor at the same office ?We have experienced b dd ng wars at every pr ce po n , from US$2 m ll on to US$10 mi ion and up?
Median sales pr ces in Aspen, Co orado
US$9 97 m ll on for a single- ami y home n 2020 US$13 4 m ll on for as ng e-family home n 2024
Janssenssays condoson the Upper East Sideare part cularlysought after a ong with those on he Upper West Side and downtown ?Buyers favor condosbecause hey?re lessrestr ct ve? you can rent them out or buy w th a trust or imited l abil ty company? un keco-ops Condos havebeen the avorite ch d for awh le, especia ly for a new generat on of buyerswho are ess concerned about be ng at a certa n address than ear er generat ons?
In add t on to prof t ng from the stock market,many New York Citybuyers in he f nancia ndustry have used the r recen bonuses to buy realestate, Koffman says ?New uxury bu dingsall over the c ty havea ready sold the r best apartmen s just from buyers look ngat oor plans?
In Aspen,Colorado,a severe lackof inventory and restr ctionson new deve opmen have kept pr ces h gh, says T m Estin,g obalreal estateadvisor, Aspen Snowmass Sotheby?sInternationa Rea ty Land use rules have restrictednew homes to a maximum of 9,250 square fee ,andnew restr ct ons may reduce tha to 8,750 square eet in 2026 ?Inventory is cons stent y 40% o 50% ess than t was before the pandemic,? he adds In February 2019,there were382 un tsfor sale n Aspen compared to 187 ist ngs n February 2025
Es in also no es that the ?b ll onaire e fect? n Aspen keeps pr ces h gh ?Whenever we havea big high-end sa e,the net effect is that it pushes average prices higher There?s a grav tationa orce for pr ces to keep ris ng? The median sa epr ce for a sing e-fami y homein Aspen was US$13 4mi lion in 2024,compared to US$9 97 m l on in 2020 ?
In the Bay Area,Ca fornia,the housing market flattened n 2024 but started this year with new momentum and a new mayor,who is generat ng optimism,says Kara Warrin,globa real estate advisor, Go den Gate Sotheby?s Internat onal Realty, serv ng Marin County and San Franc sco
?Our uxury property market sn? t impac ed by nterest rates because 85% o transact ons are w th cash,? Warrin says ?Our team sold more than US$65 m ll on between October and December 2024,with an average sa e pr ce of US$6 mi lion The buyers tend to be local peop e who want something b gger and be ter and have the cash to pay for t ?
Inventory s low n San Francisco and in nearby Marin Coun y locat ons w th ferry access to the city,such as Sausal o,Tiburon,Belvedere and Mil Va ey, Warr n adds
One trend hat he ps buyers n the area is less competit on rom fore gn investors ?The strong do lar and po t ca cl mate n the U S have kept our internationa buyer poo smal er,?she says ?Many of our buyers in the tech ndustry have done wel and need to be in he Bay Area, but we also have a ?s ver wave?of se lers and buyers
They are usua ly long-term bus ness owners or peop e who inher ted money and want to downs ze now hat they are in he r 60s and 70s?
Both groups have lots of purchas ng power, with the o der buyers ook ng for a penthouse with a view or smal er sing e- evel living and younger famil es look ng for s ngleam ly homes ?The uxury property market wil l ke y stay extreme y strong n the Bay Area,w th homes se ling qu ck y for what they are worth but no at a crazy rate of appreciation,?Warr n says ?
One of San F ancisco?s on y h stor c waterfront compounds, The Va hal a 1893 n Sausa o, Ca fornia, has hosted he l kes of Marlon Brando and John F Kennedy
When U S mortgage rates were h stor cal y ow between 2009 and ear y 2021, savvy HNWIs umped at the opportunity to inves n real estate w th ?umbo loans?Th s term refers to mortgages that exceed he limits set by the government-backed funding agenc es Fannie Mae and Freddie Mac In 2025,that means oans of US$806,500 or more in most markets, or US$1,209,750 in h gh-cost oca t es
Today wealthy homebuyers are st l ust as ikely to inves n property around the globe,but they are more ikely to pay cash now that borrow ng costs are higher According to the 2025 Mid-Year Sotheby?s Internat onal Rea ty agent survey, 88% o HNWI cl ents across the globe prefer to purchase rea estate with cash ?Our market s 80% cash, but the few clients who borrow funds to buy a property usua y pay nterest rates we be ow the standard rate,?says Dan Dockray,globa rea estate adv sor,LIV Sotheby?s Internat onal Rea ty n Colorado ?These are buyers who have a strong relationship w th the r banks, which wil typical y shave at east a po nt off the market rate?
In ear y 2025,these borrowers typ ca y paid 5% or less on a jumbo oan,compared to nearly 7% for other borrowers,he says ?Some cash buyers are actual y everaging the r nvestments and may be pu ing US$2 mi ion or more out n cash against the r assets?
Unl ke a umbo loan,which can take weeks to access because of documentation requirements and can generate substantial borrower fees, oans aga nst investments can often be approved n one day, says Ke th M Bloomf eld, founder and CEO of FFT Wea th Management,a New York C ty?based f rm tha serves u ra-h gh-net-worth ndiv duals (UHNWIs)
?Our margin rates are ower than the prevai ing umbo mortgage rate, and borrowers can everage up to 50% o the r portfolio,?Bloomf eld says
?It?s al a numbers game based on nterest rates, the r return on inves ments and whether someone needs cap ta for the r bus ness or another expense?
Financ al institut ons such as UBS, Morgan Stanley and Raymond James have excel ent programs for f nanc ng property purchases for peop e who keep the r nvestment portfolio with them, says Brian Weiner,founder and CEO of the Family Off ce Resource Group,a wealth management f rm tha also serves UHNWIs ?The challenge w th this approach s that securit es portfo ios tend to fluctuate,?We ner says ?In the event of a serious market correct on, the borrower may need to cover any short a l Another concern s that you?re commit ed to that nanc al nstitu ion, so mak ng a change might not be so easy?
An a ternat ve opt on s an ntra-family oan,o ten made v a a trust or a imitedabi ty company,which al ows UHNWIs to finance purchases made by other am ly members ?The rates for such loans are usual y much ower than traditiona mortgages,which can lead to amaz ng cost sav ngs,?We ner says
For example,as of March 2025,the nterest rate estab ished by the IRS or an intra- am ly loan of more than nine years was 4 81%, compared to 6 31% for a trad iona mortgage
survey
Economic factors varyaccord ng to the evel of wea th of the c ient ?For UHNWIs, property purchasesand sales are purely a lifestyle cho ce,?Dockray says ?At a ower pr cepo nt, such as the US$5 mil on range we tend to see more activity when the stock market r ses Buyersbe ow that point aremore ikely to pay attent on to interest rates?
However, many entrepreneurs dr ve rea estatetransact ons,so nf at on or other econom c factorsthat impact the r business could influence their rea estate decis ons Successful transactions often h nge on clien sshar ng informationabout their banking re at onsh psearly n the process Understanding whether f nanc al nstitutions can author ze andfacil tate oans in spec f c markets? spec f ca y n cross-border scenarios? can help prevent comp icat ons ?Agents need to know which lenders can work w th wealthy buyers and what they can offer,wh ch changes often,?
Dockray says When abuyer needs to finance their purchase, ?sbes to use oca enders whenever possib e The worst s tuation swhen someonehas an out-o -state persona banker who says they can execute n our market but at the ast m nute they can? t It can derai a dea to ask ase ler to wa t wh le your buyer scramb es to rearrange their financing?-
Econom st Hepp also be ieves that fore gn investment n U S real es ate could be influenced n part by geopolitical circumstances ?Wh le some fore gn buyers w l cont nue to be at racted to invest ng n U S real estate because the country is considered a stab e economy,others may be ess likely to invest here because of changes n mmigrat on pol cies,?she says ?It wi l probably balance out n the com ng years?
In terms of cross-border luxury ransact ons, there has been an increase n act vity rom U S buyers ooking to purchase propert es in Europe, a trend that was a so seen during the pandemic,Wh te says ?Market forecasts from our affi iate eaders rema n positive for the coming months This opt m sm s part cularly strong in markets such as Italy,Portugal, Dubai,the U K ,France and Spain,as we as n coun r es offer ng fisca tax benefits and res dency programs, such as Malta and Sw tzer and?
Cross-border transac ions were also dr ven by he strong performance of the U S dol ar at he start of the year Outside of Europe U S uxury property buyers are seeking homes n ocat ons such as Japan and Mexico due to currency advantages ?We are see ng a growing luxury market n Mexico that s attract ng more and more buyers from the U S ,?Wh te says ?San Migue continues to grow substant al y,as do other mostly coastal markets such as Los Cabos,Playa del Carmen and Puerto Va larta
The primary mot vations for Amer cans buy ng overseas appear o be econom cs,po it cs, ifestyle,potent al nvestment oppor unities and the favorab e exchange rate,Wh e says ?Demand from U S buyers was robust n 2024,part cularly in markets tha aligned with the r mot vat ons Portugal continues to be a compe ling dest nat on,w th U S buyers becoming the top oreign na iona ity n 2024 In Italy, he U S buyer share has sign cantly increased since 2023,fueled by the strong do lar and a new ump-sum ax regime Our af iate n Par s,France,Propriétés Par s ennes Sotheby?s Interna iona Rea ty,also noted that 70% o its foreign buyers were rom the U.S.in 2024.?
Demand for prime propert es in centra Par s rema ns strong, says De phine Gibert Av tan, director, Propriétés Paris ennes Sotheby?s Internationa Rea y ?H gh-profile sales have continued, particu arly n the most sought-after arrondissements but buyers are show ng increased se ectivity, favoring proper ies hat of er a unique architectura or h stor ca character There?s a cont nued preference for propert es w th outdoor spaces and terraces a ong w th h gh demand for meticu ous y renovated turnkey res dences There?s also an increasing focus on energy-effic ent and histor ca ly preserved properties due to evolving regu at ons and buyer preferences?
In Apr 2025,Alexander V G Kraft,cha rman and CEO,Sotheby?s Internationa Realty France and Monaco, secured the Maybourne Residences in Sa n -Germaindes-Prés,one of he most prest gious areas of Paris The residences are exclus vely l sted by Propr étés Parisiennes Sotheby?s Internat onal Realty and are the f rst pr vate homes in Paris that w ll benefit from hotel serv ces They are a so he most expens ve,w h a ?60,000 per square meter (US$5,750 per square foot) l sting price ?These developments o fer Amer cans not ust propert es bu lifestyle exper ences n prestig ous ocations,?White says The Paris res dences represen a global trend among luxury property buyers who are looking for hotel-like amenities for the r pr vate homes
Lower nterest rates n Europe may encourage some HNWIs to re-en er the market there,Gibert Avitan adds, although cash transact ons dom nate the ultra-luxury sector ?Geopo t ca uncerta nty tends to re n orce the appea of stab e uxury markets such as Paris,London and ma or European capitals?
Susta ned nterest in Par s among American buyers, particu ar y those motivated by ifestyle and long-term investment potentia , s matched by the appea of London ?Buyers n London in 2024 did very wel because there was lots of supp y and the market was unsettled before our genera e ection,?says Becky Fatem ,executive partner, United Kingdom Sotheby?s Internat onal Realty ?There?s more c arity globally now tha he U S and U K e ec ions are behind us,and there are st l good opportunit es n the U K as we?ve exper enced a s gnificant exodus of foreign buyers?
Some wealthy peop e from Europe,the Midd e East and Africa have left the U K since reforms in 2024 el m nated long-s and ng tax benefits for res dents whose permanent home s outside the U K In addit on, in November 2024 the new center-left U.K.government ?
PHILIP A W HITE JR.,president and CEO,Sotheby?sInternational Realty
mposed a 2% surcharge on home purchases made by non-residents and an extra 5% on buyers who own more than one res den ia property
In 2024,Amer cans made up 20% of foreign buyers n the U K,according to Fatemi The market segment between £2 m ll on and £10 mi lion (US$2 6 mi lion to US$13 m lion) remains active, w h foreign buyers predominantly purchas ng propert es as a pied-à-terre or nvestment assets for fami y members In add ion, nteres rates are lower n the U K Robust bonuses for people in the f nanc al sector a so led to a boost in purchases at the end of 2024 and in ear y 2025
?One reason Americans were buy ng in the U K s he strength of he do lar compared to the pound,? Fatemi says ?Even though they m ght have to pay stamp duty of as much as 19%,the strength of the do ar and ower interest rates offset the expense?She says prices are the highest they have ever been,so buyers from Dubai and Abu Dhabi are also ooking to London or nvestment oppor unities
THERE?SMORE CLARITY GLOBALLY NOW THAT THE U.S.AND UK ELECTIONS ARE BEHIND US
Austral a?s uxury real estate market a so showed robust performance in 2024 ?Sydney Sotheby?s Internat onal Realty achieved a record year in 2024,? Wh te says ?Our brand a so has p ans for cont nued expans on in Austral a in the coming months?
Sydney rema ns one of the wor d?s most expensive luxury property marke s Other cap ta markets n Melbourne,Perth and Brisbane represent attrac ive alterna ives for luxury property buyers seeking va ue and ifestyle appeal
Melbourne Sotheby?s Internat ona Realty set a record for the South Yarra neighborhood w th the sae of a contemporary home for just under AU$26 m l ion (US$16 5 mi l on),the highest recorded pr ce since 2018 and a new record per square meter at AU$41000 (US$26,127) ?I beieve we? l continue to see this rend for strong demand for luxury real estate by the ultra-rich and f nite supply in h ghly sought-after suburbs o Mebourne,wh ch offer wor d-c ass
amen t es,?saysAntoinette N do,managingd rector, Melbourne Sotheby?sIn erna ona Reaty In Austra ia?smajor c ies, demand sbe ng driven by UHNWIsand an increas ng appetite for prest ge property investments Marke forecasts from data analy ics f rmsCotal y and Doma n sugges a 5.3% annual property valuegrowth ratefor 2025 compared o 2024,alongw th sustained interest n landmark residences and brandeddevelopments Wh e foreign purchases of ex sting homes areon ho d for two years rom Apr l 1,2025 the samerestrictions do not apply o new deve opments,wh ch represent ownershipand nvestment opportunit es for overseas purchasers ?In NewZealand,a sign cant market development emerged inMarch 2025 withupdates to the Act ve Investor Plus Visa Scheme?White says ?Thispo icy change now permits foreigners to own homesbased on e ig b lity re ated to investment thresholdsand physica presence requirements New Zealand Sotheby?s Internat onal Rea ty was nvo ved n the top three nat onalsales n 2024 and s xof the top ten, suggesting strong underly ng market momentum ??
BECKY FATEMI executivepartner UnitedKingdom Sotheby?sInternational Realty
Property marke s in China strugg ed n 2024, and measures have been taken to deliver stabil y ?The government has e iminated excess ve s amp dut es and n roduced programs to attract wea thy nd v dua s, family offices and qualified professiona s, encouraging a new wave of potential buyers from he Ch nese main and, Southeast Asia and the Middle East,?White says S ngapore?s luxury hous ng market was no iceably slower unt the summer of 2024, when interest rate cuts by the U S Federal Reserve encouraged econom c conf dence among homebuyers and nvestors, says Sueann Lye, global rea estate advisor, L st Sotheby?s International Realty, S ngapore
?There was a not ceab e flow of wealth into the Singapore market in 2024, nd cated by higher sales n the second ha f of the year,?Lye says ?On a per-square-foot basis, the average pr ce o so-ca ed ?good-c ass bunga ows?rose 4% year-over-year from 2023 to 2024 In 2025,we expect the good-c ass bunga ow market to strengthen and pr ces to rise marginal y due to he imited supply?A ?good-class bunga ow? s a plann ng des gnat on that nd cates a s ngle-fam y home located n one of 39 resident al areas and on a ot o at east 1400 square meters (15,070 square feet). They are yp cal y the most uxur ous and costly homes n Singapore
However, uxury apartmen s did not perform as we l, w th otal sales down 30% n 2024 compared to 2023, Lye says. She an ic pates he current performance of apartments o remain the same n the second half of 2025 ?This could be attr buted to the lack of new luxury pro ects for sale n 2024 and to the hike in add iona buyer?s s amp duty (ABSD) Since Apr l 2023, foreign buyers of res den ia properties have to pay 60% of the sales pr ce,which is a deterrent In add tion, ABSD rates were raised for citizens and permanent residents buy ng second propert es from 20% to 30% ?As a result, uxury properties n S ngapore are increasingly being purchased by citizens and permanent residents as their primary residence ?We have noticed an increas ng number of buyers from the U S Norway and Switzerland over the past two years,?Lye says ?Under their respect ve free trade agreements, nat onals and/or permanent res dents from these three countr es who buy res dent al propert es n S ngapore, as we l as those from Ice and and
L echtenstein, wil be accorded the same tax treatment as Singaporean citizens,?Lye says More broad y n Asia, the Sotheby?s International Rea ty brand opened an office in he Phi pp nes in March 2025 o w den its reach in he region ?The luxury resident al rea estate sector n the Ph lippines has seen steady growth ue ed by increased demand from affluent buyers and nvestors,?White says ?As the f nanc al center o he country and a key hub for mu t na iona corporat ons, the city of Makat is the pr me location for high-end residences offer ng premium amen ies and security?
Desp te ongoing g obal econom c and geopol tical chal enges the uxury rea estate sec or in the M dd e East remains robust,says Zhanna Yerkozhanova, genera manager, Qatar Sotheby?s Internat onal
Rea ty ?HNWIs are actively purchasing exclus ve propert es in the top locat ons Th s year, foreign nvestment s antic pated to rise due to favorab e exchange rates and government in tiatives attrac ing affluent buyers?
Approximately 6,700 m ll onaires are estimated to have m grated to homes in the UAEin 2024, w th Dubai recogn zed as a uxury property magne S mi ar to other h gh-end markets, Duba continues to struggle to
keep up w th demand An array of uxury mansions and pen houses that range in price from US$60 m lion to more than US$120 m ll on are under construction or recently completed n Dubai for buyers from Europe, As a and he Americas, according to a February 2025 Bloomberg report
Branded residences in the Gu Cooperation Council (GCC)? which inc udes Bahra n Kuwa t, Oman, Qatar, Saudi Arab a and he Un ted Arab Em rates? are anticipated to stay strong as buyers seek not ust luxury but ntegrated exper ent al ifesty es ?Qatar s un quely positioned as a lead ng Middle Eastern economy, benef t ng from a strong bank ng sys em, no personal ncome tax and the possibi ty for nvestors to obtain permanent residency,?Yerkozhanova says ?Qatar?s strategic vision and infrastruc ure inves ments pos t on t or continued nterest and potent al growth n the uxury sector, along w th ts pos t on as a gateway be ween Europe and As a?
Oman, known as a tourism destination for ts beaut ful landscapes, a so has a stab e economy bo stered by o l reserves and progressive government po ic es, which has ed to its emergence as a hub for nternat ona bus ness, capital transfer and imm gration ?Our exc usive pro ects? the Residences at the St Regis Marsa Arabia sland, the Pear ? Qatar and the Residences at the St Regis A Mouj Muscat Resor ? cons stent y attract internationa buyers,?Yerkozhanova says
The uxuryproperty market has demons rated remarkable strength even in the face of broader econom c chal enges as the Sotheby?s Internat onal Rea ty brand demonstrated in 2024, Wh tesays ?Luxury realesta e has cons stently led the market and ou performed the industry Sa es are taking p aceat a steady pace, and we an ic pate his momentum to continue. Aff uent buyers rema nact ve, and the demand for h gh-end propert es rema ns strong?
In 2025,Wh te ant cipates sa es in the globa luxury property market w ll cont nue to show grow h ?Ac ive hous ng inventoryis ris ng n most markets on a yearover-year basis,but some sti rema ntight,?hesays Accord ng to NARdata re eased at he end of May 2025, hous ng inventoryin the U S c mbed near y 21% from a year ago ?Overa l,we are op imistic about the future of the globa uxury property marke The comb nat on of s rong demand, mpressive sales growth and the resi ence of the uxury segment pos tions t well for cont nued success n the coming months?
As luxuryproperty buyers and sellerscontemplate the r next movesfor 2025 and beyond,they are ikely to focus attent on on marketsthat cons stently demonstrate res iencein any economic cl mate -
Luxury real estatepresentsresilient
On-aga n off-again ar ffs stock market vo ati ity, stubborn nf at on and currency fluctuat ons are ikely to continue to affec g obal rea estate markets n the com ng mon hs, but they cou d stil present opportun t es for some buyers
?Desp te elevated nterest ra es and slower overa l sales act vity the high-end real estate segment cont nues to show resi ence,?says Odeta Kushi, deputy ch ef econom st, F rs American Financ al Corp , a prov der of tit e, se t ement and risk solutions or real estate transactions. ?Wea thy homebuyers are often motivated by l festyle, portfo io strategy or long-term bets on a spec fic market, not ust short-term cos considerat ons And, whi e headwinds such as trade tens ons or financ al market vo at ity may sh ft the pace or location of demand, they rarely erase it ?
The upper end of the housing market has consistent y performed we n the past ew years attribu ed in part to strong s ock market performance,says Lawrence Yun, chief economist,National Association of REALTORS®(NAR)
Wh le noting hat market dynam cs m ght emporar ly slow act vity, Yun rema ns opt m stic about uxury real
estate?s long-term tra ectory ?We?re start ng to see a ittle hes tancy at the upper end, mostly because of the uncertainty about where the stock market wi be in a month or next year?Yun says ?But in the b g pic ure, there?s s zab e pent-up demand for trade-up buyers In add tion,even w h a stock market correc ion, there?s p enty of househo d wea th be ng trans erred o the next genera ion hat wil add to the demand for uxury housing?
?Res dent al construct on costs, already more than 40% h gher than pre-pandemic leve s, could be further s ra ned by sustained tar fs,?Kushi says Buyer preferences may shift toward turnkey homes hat avoid the added cost and de ay of new construct on or ma or renova ions, she says ?If tar ffs cont nue to ncrease construct on costs that w ll l ke y jeopardize profits on he already sl m marg ns in the build ng ndustry,?says Joel Berner,senior econom st, Realtor com® ?It?s kely more bui ders wi l p vot to higher-
end homes where the prof margins are a ittle better wh ch would ncrease the inventory of uxury homes?
?Among the op 10% of wealth est households, rea estate represents 18 7% of the r to a inves ment por folio, down from 19 9% two years ago,?according to a Realtor com®Apr l 2025 report, Berner says That percentage may be h gher after he most recen stock market correction, he adds
Stock marke volatil ty can have a dua e fect on the luxury hous ng market, Kushi says ?On one hand, sharp sw ngs in equ ies can prompt some h gh-net-wor h nd vidua s to de ay b g purchases due to uncertainty,?she says ?On he other, rea estate? espec ally in pr me markets? might be seen as a safer more tang b e store of va ue?
The US$1-mil on-plus segment has continued to grow in 2025, now comprising nearly 13% o all recen exist ng-home sales, according o April 2025 da a rom NAR, Kush points out ?This sugges s many affluent buyers stil see real estate as a safe place to park money, o fer ng both investmen potent al and the va ue of a place to l ve,?she adds
?When the stock market exper ences severe swings, wealth er households in the U S and g obal y, ook for a more tang ble, secure asset,?Yun says ?If the stock market cont nues to be vo at e, people are more ke y to nvest in rea es ate as a hedge against uncertainty,?he says
Berner ant cipates the U S Federal Reserve Board (the Fed) to ho dinterest rates steady at least unt l several months of better inf at on numbersare reported Tariffs are expected to driveprices higher, wh ch works aga nst ower ng interest rates, hesays
However,slowdown r skshave r sen due to evolv ng rade policies,Berner continues ?[It] sn? t necessar y bad for the hous ngmarket, with the except on o the 2008-2010 housing-led downturn Per ods of econom c cooldowns usua y generate lower interest rates,wh ch has a pos t veoverall impact on the housing market, even the upper end?
n ation in May remained steady,accord ng to a June 2025 report in The New York T mes,and most economists ant cipated that the Fed wil cont nue to hold interest rates at 4 25%?4 5% for the res of 2025 Meanwhile trade wars ed to a weakeningdollar? down 9 07% for the year as of June 18, 2025 according to The Wa Street Journal n mid-May, off cia s n China and the U S agreed to a 90-day pause on new ar ffs according to a May 2025 report by AP News As par of the agreement, he U S dropped itstariffs on Ch na to 30% from the previous 145%,whi e China dropped itstariffs on U S products from 125% to 10%
Overseas nvestor purchases n the U S slowed when the do lar was s reng hening,wh ch made more cos ly to buy n the U S ,Yun says However a weaker do lar could make the U S more attract ve to real estate investors,Berner says
?When a loca currency weakens, nternationa buyers withstronger currencies may f nd better va ue, ef ect ve y boosting the r purchasing power,?Kush says ?But it?snot just about pr cing? currency shifts often reflect broader economic signa s?
?The President?s ?Go dCard?proposed visa program, wh ch offers a path to citizensh p or people who invest US$5 m ll on,could potentia ly boost h ghend demand for U S rea estate,?Yunsays
Continued volatil ty on many fronts s ant cipated n 2025, but the luxuryhous ng market s ke y to be a source of continued opportun ty -
W hat natural disastersand market shiftsmean for homebuyersand sellers
In January 2025, Cal forn ans w tnessed the devastat ng mpact of 14 wi dfires that swept through Los Ange es and San Diego Counties The destruc ion was w despread and ABC News reported that, by March 2025, the f res had burned 37,000 acres o and and destroyed 16,000 bu dings before being conta ned
Meanwh e, thousands of mi es away, a 77 magnitude earthquake struck Southeast Asia that same month, centered ust s x m es from the c ty of Sagaing n Myanmar In ear y April 2025,a spokesman for the ruling m itary government sa d at least 3,649 people had been kil ed The earthquake a so affected neighboring countr es ncluding Tha and, Laos, Bangladesh, nd a and China
Both disasters served as stark rem nders of nature?s capac ty to transform communit es and reshape andscapes in a matter of days From hurr canes and w df res to floods and ear hquakes, natural d sasters are no on y dead y, but hey also exert a huge f nancia tol In a year def ned by cl mate volati ty, 2024 saw g obal na ura catastrophes cause an estimated US$320 b ll on n econom c osses, with insured osses reaching between US$135 bil on and US$140 b ll on, accord ng to analysis pub shed n January 2025 by the nsurance compan es Mun ch Re and Swiss Re These figures mark a stark departure from h storic norms, sign f cant y exceeding the nf at on-adjusted nsured loss averages o he past decade? and even the past 30 years.
Accord ng to a January 2025 report by Moody?s, 2024 was the fifth consecu ive year in wh ch nsured g obal osses from natural disasters surpassed US$100 b ll on, point ng to a sustained period o cl matic d srupt on The ma ority of the osses were weatherrela ed, driven by powerful na ura events ncluding trop cal cyclones, severe s orms and flooding No ably,
near y a th rdof the insured osses were attributed to major hurricanesmak ng and a l n the U S
The number of such damaging natural disasters s grow ng Accordingto data re eased in January 2025 by the Nat onal Centers for Environmental Informat on, part of the Nat onal Ocean c and Atmospheric Administrat on, in 2024, theU S alone suffered 27natura d sasters where the es imateddamage exceeded US$1b ll on This trend ishav ng profound consequences for h gh-end property marketsaround the wor d,reinforcing the increasing mportanceof consider ngcl mate resi ence when nvest ng n uxury rea estate
The recovery period after a d saster can a so affect the real estate market,as homeownersnavigate insurance c aims, changes to zoning laws andthe emotiona and financ al costsof rebu lding or reloca ing Accord ng to a May 2025 report from Bank of Amer ca nst tute,23% of U S homeownershave exper enced property damage or loss n the pas f ve years due to severe weather and 65% are prepar ngtheir homes to withstand future events
Homeownersaffected by natural disasters typically have threemain options: rebu lding their property to ts or g nal spec f cat ons,reconstructing withenhanced c mate resi enceor moving to a new ocation
Each opt onimpacts housing inventory and luxury home pr cesd fferent y? rebui d ng or upgrad ng s ows the returno homes to the market, imit ng supply and potent al y dr ving up pr ces, wh lerelocation can sh t demand to new areas, putting upward pressure on pr ces n ess-affected,high-demand reg ons These dynamics can create local zed surges or shortagesin luxuryreal estate nventory, depend ng on the paceand sca e of recovery We have out ned the specific concerns and opportunitiesre ated to each opt on overleaf ?
THE NUMBER OF DAMAGING NATURAL DISASTERSISGROW ING? REINFORCING THE INCREASING IMPORTANCE OF CONSIDERING CLIMATE RESILIENCE W HEN INVESTING IN LUXURY REAL ESTATE
Source: NOAA www nce noaa gov/access/ b l ons T me period No of na ural d saste s Cost US$) Deaths
Source Mun chRe and Sw ss Re
Rebui d ng to spec? restoring a home to s pre-disaster cond t on? a ows homeowners to rega n some semblance of norma ity It is also often the most stra ghtforward option, prov ded that any nsurance payout s suff cient to cover the construction costs and ocal regu at ons a low for it
Accord ng to the 2025 M d-Year Sotheby?s International Realty agent survey, 46% of respondents said he op concern o cl ents who l ved in areas tha had exper enced weather-related damage was rebu ding their home o ts or g nal state This was followed closely by rebuild ng to a more damage-resis ant standard (21%) ?Many peop e are ooking o bu d exactly as before,? says Joe C l c, g obal rea estate advisor Sotheby?s International Realty - Pac f c Pa sades Brokerage, a though some leeway is being allowed because many homeowners ost houses that were built decades ago ?Fo owing the w d res, bu ding regulations have been re axed so people can bui d homes 10% b gger than what they had or to he current bui d ng code, whichever s greater?
Prices o homes and land n the area have also been a fected by the fires ?The average sales pr ce or a sing e fami y home n the Pac f c Pal sades was US$4 6 m l on in 2024, and it is the same in 2025 However, there have not been many sa es o surviv ng homes s nce the fire? on y 11as of Apr 2025 Interest ngly, the average list pr ce currently for surv ving homes s US$9 7 mi lion, wh ch s a s gnificant ump from h storical norms However, this s due to ow inventory n the fire-impacted areas and a more typical nven ory in he pr ciest area of the Pa sades, the Riv era, which was largely unaf ected by the fires,?C lic adds ?Pr or to the f re, we d d not have many vacant land sales, and now we do, w th current asking prices ranging from US$750,000 to US$8 25 mil on, and an average sa e pr ce of US$2 8 mil on n comparing th s to pre-fire values of propert es that were torn down to build, for example and value sa es, we have seen prices of land d scounted between 20% and 35% compared to pre-fire sales?
The new land sa es align w th estimated h storic land va ues based on a rule of thumb that a plot of land n Los Ange es is worth between 40% and 60% of a property?s overa value This ca culation has h storica ly been used to estimate land va ues even when few vacant parce s were availab e for sa e Se ma Hepp, chief econom st for Cota ity, to d Hous ngWire n March 2025 that the cost of land n Los Angeles has a ready increased at triple the pace s nce the onset of the pandem c, wh le home prices have gone up about 50% While rebu ding e forts cont nue, the process s stil evolv ng, and many homeowners are working through the comp ex t es of both regulatory adjustments and the sh fting rea estate market ?Thus far, only approximate y 4% of the homes damaged or destroyed in the Pa sades F re have come o market, as of May 2025,?Ci c says ?We expect that number to increase over the next couple of years to between 10% and 15%, bu the vas major ty of owners n end to rebuild, and many pro ects are already underway, with plans submitted for approval?
However,rebui d ng to spec is not always feasible Updated bu ldingcodes n roduced by oca or nationa governments a ter ad saster might requ re a erat onsto a home that ncrease the cost of rebu d ng beyond what the insurancepayout w l cover AFebruary 2025 study by First Street,a companythat mode s the financ al risks caused by c imate change, found that by 2055, c ma edriven eventsw l ncrease homeowner insurance premiums byan average of 29 4% nationwideand could result in thedestruction o US$147 tri ion n rea estate In reg onsprone to flooding,such as parts of Flor da, new regulationsmay mandate e evated foundat ons to reduce the risk o future damage According to the Federa Emergency Management Agency (FEMA), ust one inch o f oodwater can cause up to US$25,000 n damage Nav gat ng these evolving bu lding codes requires homeowners to ba ance heir des re for a simi ar home with the rea ity o new regu at ons Whi e some may eel that rebuildingto spec offers a sense o closure, it?s crucial to weighthe financ al feasibi ty aga nst any regu atory challenges ?
A natura disaster can g ve property owners the opportun ty to enhance the r home?s resil ence, and many are opting to do ust that For examp e, in wi dfire-prone areas they m gh nstall ember-resistant ven s in the roof and create landscaping w th open spaces free of any combustib e plants to act as a firebreak n reg ons prone to storms and ocean surges, upgrades such as hurr canerated windows, structura re nforcement and mproved drainage systems are possible options
After the fires n Ca ifornia, it became apparent that many of the surviving houses incorporated some f represerva ion eatures, accord ng to a January 2025 report by the Los Angeles Times ?Some houses were better suited to handle w ldf res, so there wil be a push o ncorporate more res lience when rebuild ng?C lic says This wi a so be the case for people ooking to move o the a fected areas and bu ld new homes
Th s market sh f s ev dent n the Pacific Palisades ne ghborhood where despite an estimated US$22 bi ion n real estate losses, according to a February 2025 report n the Los Angeles Times many have reta ned the r va ue According to data on the Pacific Pa isades hous ng market trends by Realtor com®,the median list ng home pr ce n the Pac fic Pal sades ne ghborhood was US$6 2 mil ion n March 2025 an 113% ncrease on the year before Similarly, a though Altadena saw a loss of over US$78 b lion in property value, th s has not led to a market collapse The median list pr ce in Altadena in March 2025 was US$12 m ll on, accord ng to Realtor com®, about in ine w h s US$126 mil ion median list price one year ago ?People who elt they were priced out of Paci c Pal sades are now entering the market,?Cl c says ?The consensus s tha the neghborhood wi l be even more des rable after the rebu ld because everyth ng w l be new Peop e fee ike t?s going to be an even h gher-end luxury property market?
In fact,the post-d saster market is exper enc ng ncreased nterest part cu ar y where there are opportun ies for rebu ding or new construc ion An Apri 2025 repor by The Wa l Stree Journal supports th s and found tha wealthy ind viduals con inue to move to locat ons that are at risk of c imate events and are ?sett ng homeprice records when they get there?Indeed,desp te recen storms,two c t es a ong For da?s west coast,Naples and Tampa,were dentified by adv sor Hen ey & Partners as ?future wea th hotspots?in ts USAWea h Report 2024
The f nanc a to of the Los Angeles w ldfires
US$22 b ion n rea es ate los n Pacif c Pal sades
US$78 b ll on n real estate ost n A tadena
Source: Los Angeles T mes
US$7.8B Altadena
One of the key advan ages of rebui ding w th disasterres stant features is the potentia for long-term f nanc al benef s Homes built to w thstand future d sasters attract reduced insurance premiums and offer greater ong- erm value and peace of m nd for the r owners Moreover,many munic pal t es now mandate better safety measures as part o the rebuild ng process
Th s trend s particu ar y ev dent in coastal regions, where modern construction standards are p ay ng an increas ngly s gnif cant role in shap ng rea estate markets ?The contrast between o der and newer homes in coastal markets has never been more apparent,?says Budge Huskey,pres dent and CEO,Prem er Sotheby?s International Realty,which has off ces n Forida and North Caro na
?In some cases a beachfron home may sustain catastrophic damage,whi e a ne ghboring structure bu lt under more s r ngent regu at ons rema ns v rtual y untouched Forida?s 50% rule underscores this dynam c, requir ng that any home sustaining damage exceed ng 50% of the value of mprovements s rebu lt or replaced to meet current codes.Wh le th s may seem r gid,it ensures he continued enhancement of coastal infrastruc ure,foster ng a market where builders and buyers a ike can se ze the opportun ty to create res lient residences??
The recent impact of Hurr cane Helene was less predictable or homeowners in Nor h Carol na For example, B ltmore Forest, among the most des rab e upsca e res den ia communit es in Ashevil e, is est mated o have lost 100,000 trees but only 35 homes were damaged
?The event led to w de y d sparate outcomes, w h some sma l vil ages a ong r vers destroyed whi e other areas pr marily suffered tree damage,?says Huskey ?Ashev le experienced terrible des ruction n some areas from the flooded river but other places saw im ted or no damage whatsoever to structures?
The resil ence n th s case app es to the area?s marke overall, ra her than indiv dual propert es ?Closings were de ayed yet most pending transact ons moved forward Most of the properties tha were damaged were repa red and returned to the market,w th he except on of the most highly impacted areas Whi e the evidence of He ene remains s gnificant to th s day,
mon hs af er the event, the vast major ty of homes on the market are undamaged?
Addit onally, a pattern of marke recovery emerged immed ately fo lowing he hurricane. According to an October 2024 repor by Hous ngW re, new home is ings n the Ashev lle North Carolina me ropo tan area ?snapped back sharply?c oser to norma eve s in the week fol ow ng Hurr cane Helene, with sources report ng that ?out-oftown investors were among the most nterested buyers?
Coastal markets worldwide have also implemented measures to m t gate the impact of natural d sasters and ensure ong-term stab ity ?Phuket and Koh Samui in Thailand have been affected by ma or s orms over the years, a though propert es there haven? t su fered as badly as those ba tered by the hurr canes n the U S ,?says Felix Desjardins, globa real estate adv sor, Lis Sotheby?s Internat onal Rea y, Tha and ?A part cular y catastrophic disaster was the 2004 Indian Ocean sunam , which severely damaged arge
parts of the western coast of Phuket That location is thr ving at he moment and s the most n-demand The government has tsunam alarm systems n place and establ shed safe evacuat on routes A though a tsunam of that strength s probably a once- n-a- ifet me event, some buyers are avoid ng the beachfront and opting for hi s de locat ons ust in case?
This cautious approach by buyers mirrors a broader globa trend, where both regu atory improvements and shift ng buyer pr orit es are shap ng the fu ure of luxury rea esta e in disas er-prone reg ons ?Over the years, two key trends have emerged in response to natura events,?Huskey says ?F rs , mun cipa bu lding codes for new construct on continue to evo ve, reinforc ng homes against severe storms through elevated structural requ rements Second, buyers are becoming ncreas ng y se ect ve, eva uat ng properties not only for their lifestyle appeal but a so or the r ong-term nvestment v abil ty based on perceived r sk?
For some homeowners, the emotiona and financial burden of rebu d ng after a disaster? paired with the uncer a nty of future events? eads them to consider re ocat ng
In many cases moving ust a short distance can provide a safer iv ng environment, whi e maintaining proxim ty to am iar surround ngs ?We see many peop e mov ng away from the coast? but no too far away,?says Melinda Gun her, g obal rea esta e advisor Prem er Sotheby?s
Internat onalRealty n Naples, F orida ?Beachfront people arehappy to ooktwo or three m les n and?
This sh f in behav or has a direct impact on real estate markets and underscores the grow ng nf uence of c mate change on where and how people choose to l ve, with someregions already see ng sh fts in buyer preferencesand housing demand
?WhileNorth Caro ina?s rea estate market has yet to experiencesign cant sh ts due to recent storm activ ty, Flor da?s coastal regions are seeing nuanced changes n buyer behavior,?Huskey says ?The mpact of s orm surges caused by recen hurricanes has prompted some ong-term residents to consider trans ion ng to country club commun t es or uxury condominiums,pr orit zing the convenience of a ?ockand- eave?l festylewith reduced property maintenance?
In other countr es, reg ons suscept ble to natural disasters may differ from pr me uxury rea estate locations, as in Japan, where major earthquakeshit the southernisland of Kyushu in 2024 and 2025 ?In the Tokyo me ropo tan area,our main target area we have not seenany pr ce h kesor decl nes due to natural disasters,?says Kantaro Aok global rea estate advisor, List Sotheby?sInternat onal Rea ty, Japan ?This may be due to thefact that the areawas not near the epicenter of the recent ear hquakes?
Interestingly,re ocat oncan a so crea e new opportunities When homeowners eave d saster-prone areas, their homes become avai able to newcomers? sometimes making these reg ons more des rab e in the long run ?In he weeks o lowing Hurr caneHelene, our ?
adv sors n North Carol na facil tated two record-break ng sa es? setting new pr ce benchmarks for the en ire state,? Huskey says
One of these sales? a 5,200-square-foo four-bedroom home on f ve acres in Linvil e,North Caro ina,that only had generator power fol ow ng the storm? c osed for an impress ve US$14 m l on ?As expected,market activ ty temporari y softened in the immediate a termath as buyers and sel ers reassessed cond t ons,but the resi ence of the luxury sec or rema ns ev dent, dr ven by a ong-term vision and con dence in these coveted markets?
By adap ing to evolving risk factors and sh fting preferences,both buyers and sel ers are p ay ng a ro e n shap ng the future o real estate in disaster-prone areas.
As c ma e-driven events become more common, real estate markets are responding w th a mix of resi ience, regu at on and stra eg c decis on-mak ng In h gh- mpact areas nclud ng Pacific Pal sades and Altadena, property va ues rema n strong despite significant osses, as many homeowners choose to rebu d with enhanced disasterresistant features, o ten encouraged by more flexible bu lding codes Meanwh le, others are op ing to relocate, fue ing demand n ad acent, ess-affected areas and reshaping buyer behav or
For sel ers, this means a potentia ly compet ive market f they stay and rebu ld w th modern safety standards, ncreasing long-term property appeal For buyers, the current climate presents oppor unit es to enter previously inaccessib e luxury property markets ? though often w th a higher emphas s on insurance structural resil ence and r sk m igat on Ultimate y, whether stay ng or moving, homeowners must weigh lifestyle preferences against evo ving risks and the economic rea it es of c mate change -
Safeguarding wealth with specialized coverage
THE NEIGHBORHOOD W ILL BE EVEN MORE DESIRABLE AFTER THE REBUILD BECAUSE EVERYTHING W ILL BE NEW
JOE CILIC
global real estateadvisor,Sotheby?sInternational Realty
- PacificPalisadesBrokerage
Insurance po ic es to cover the possessions and property of the wea thy are far rom one-size-fits-al Their assets may encompass everything from mu tim l on-dol ar estates to rare cars, w ne ce lars, yach s and pr celess co ections of fine art, so high-ne -worth ndiv duals (HNWIs) requent y turn to specia st insurance profess onals and compan es.
?When advis ng c ients on protect ng the r property, the rst step is ensur ng they have a robust insurance po icy ta lored to its value and unique features, inc ud ng coverage for high-end finishes, smart home techno ogy and add t ona structures such as guest houses or poo s,?
says Chase M ze , global rea esta e adv sor, At anta Fine Homes Sotheby?s Internat onal Rea y ?I also recommend consu t ng a risk management specia ist to exp ore excess iab ity coverage and f ood insurance, even if their property s not n a f ood zone?
For uxury homeowners, rebuild ng a home fo lowing a disaster can be complicated Many HNWIs invest heav ly in bespoke architecture, custom finishes and rare ma er als that can be hard to source or replicate Luxury homes a so often come with bespoke fea ures such as extensive andscap ng, ndoor sw mming poo s and advanced home technology, a l o wh ch can s gnificantly increase the rebuilding cost Trad t ona home nsurance po cies, such as the state-sponsored Cal orn a Fair Access to Insurance Requirements (FAIR) P an, wh ch has a maximum coverage of US$3 mi ion, may not adequately cover these assets Luxury homeowners may
need po ic es hat account for the cost o rebu lding w h h gher-quality materia s and design services.
One mportant option is a guaranteed or extended replacement cost po icy ?Guaranteed rep acement cost provides more coverage than standard replacement cost,?says Carolyn Boris,v ce president and product development manager,persona r sk services,for insurance company Chubb ?In general,guaranteed rep acement cost means the nsurer wi l repa r,rep ace or rebuild damaged property to the same or s m lar design,using materials and workmansh p of comparab e qual ty Depending on the nsurer and the state where the proper y is oca ed,the cost to repair,replace or rebui d may exceed the amount stated in a standard rep acement cost pol cy.?It can even cover an unl m ted amount or a specified percentage over the pol cy amount,Boris adds
Whi e pol cies ke these come at a premium, they offer va uable peace of mind Guaranteed replacement cost coverage ensures hat the homeowner won? t be eft to cover the dif erence shou d rebu lding costs exceed the po icy?s l mit ?A l nsurers that specia ize n insuring high-va ue homes offer some form of P
guaranteed replacement cost coverage, though they may have d f erent names for t, such as extended or enhanced rep acement cost coverage,?says Boris
Items such as f ne art, rare ant ques, des gner cloth ng h gh-end ewelry and luxury watches are ust some of the ob ects that can be damaged when a home is destroyed Standard nsurance po cies often fa l to account for the true value of such items, wh ch s where specia ized polic es come n o p ay Any valuab e item should be appra sed by an expert to determ ne ts current market value Once the va ue s agreed upon, a spec alized insurance po icy can be crea ed o ensure the asset is suffic ent y protected
?We recommend that col ectors update any appraisals on a regu ar bas s to ensure tems are insured n line with the market,?says Laura Doy e, senior v ce pres dent o ne art and va uab e col ect ons product manager at Chubb ?For most va uable ob ects, the recommended time frame for reappra sa is every three to five years In more dynamic markets, such as pos -war and contemporary art, we recommend review ng values every one to three years Insurance schedu es should be updated with the most current values Appra sa feesshould be based on an hour y rate and never t ed to the value of an item.? Wea thyind vidua s of en ho d the r property n trusts to preserve wea th through genera ions and to mitigate tax abil ies. However, when it comes to nsurance, the structure of the property ownership can add an extra ayer of complexity A common mis akeamong HNWIsis neglecting to havethe trust named as the owner on the nsurance pol cy This oversight can create poten ia egal and financial prob emsif something were to happen to the property ?Ho d nga res dence in a trust offers pr vacy,estate p anning benef ts and asset protection,?M ze lsays ?It al ows the owner to contro how the property is managed and transferred,wh e avoiding probate and potentia y reduc ng estate tax exposure It s cr t cal that the trust scorrect y l sted as the owner on the nsurance pol cy Many insurers require additional endorsements or spec f c anguage n the pol cy to ensure proper coverage Cl entsshould work c osely with the r estate at orney and nsurance provider to structure the trus appropr ately and avoid coverage gaps?-
A look at thelocationsthat arebecoming or re-emerging ascentersfor high-end living
Demand for h gh-end goods and rea estate might not run n tandem, but they are both good indicators of emerging or improv ng uxury markets In February 2025, for example, So heby?s held s f rst nternationa auction n Saud Arabia
The sa e n the histor c town of D riyah inc uded f ne ar , watches, jewe ry, handbags and spor s memorabil a In downtown San Franc sco, Californ a, meanwh le, esteemed internat onal brands are moving into premises that had been vacated due to the c y?s chal enges fo lowing he pandem c Ind a?s highnet-worth indiv duals? whose numbers are increasing? are also deve op ng an appetite for expens ve branded products and properties, wh e Puerto Rico is becom ng a popular locat on for wealthy peop e seek ng vacation properties or second homes
In 2024, he g obal market for persona luxury goods experienced s f rs correct on in 15 years Although sa es were down by it le more than a percentage po nt rom the prev ous year, some analysts be ieve the change could signa a potentia slowdown in the uxury market overa ?Al of the indus ry?s growth-driving engines have stalled,?was the assessment of consu tancy McKinsey & Company in s January 2025 report The State of Luxury: How to Nav gate a Slowdown
However, analysts at fe low consu tancy Bain & Company be ieve the long-term trend for luxury spending rema ns pos t ve, though there has been a s gn f cant sh ft n consumer preferences, according to a press re ease from November 2024 ?Luxury spend ng has shown remarkab e stab ity this year desp te macroeconomic uncerta nty, largely driven by consumers?appetite for luxury exper ences,?sa d C aud a D?Arp zio, Ba n & Company partner and lead author of the company?s annua Luxury Goods Report
Bain?s tracking encompasses nine ca egories,includ ng cars,hosp ta ity persona goods and art There was a notable sh ft towards ca egories such as gourmet food and fine dining (up 8%) and private yachts and ets,with spending up by 13% The market for cruises grew by 30% Meanwh le the 2025 Mid-Year Sotheby?s Internationa Rea ty agent survey identified art and cars as the ead ng uxury products high-end homeowners also nvest n Luxury consumer behav or doesn? t stop at goods and exper ences? has fundamental y reshaped expectations in h gh-end rea estate markets as we l The shift toward ?experiential luxury? is an evo ving consumer trait that has become prom nent n real estate, part cularly at premium pr ce po nts ?What?s driving oday?s h gh-end market s the feel ng a home delivers as much as ts address,?says Tammy Fahm , senior v ce president of globa serv cing and s rategy, Sotheby?s Internationa Realty ?What we?re witnessing n luxury rea estate sn? t jus a trend? t?s a fundamental redefin tion of value Th s experient al revolut on transcends cultural boundar es, with buyers w l ng to pay substant al prem ums for propert es that of er exceptiona features tha reflect their ifesty es?
Th s s backed up by f nd ngs in the 23rd edit on of the annua Luxury Study, released n January 2025 by Ba n & Company and Fondaz one A tagamma, the trade associa ion o a an uxury goods manufacturers According to he report, desp te a slight decrease of 1% to 3% in overall luxury spend ng in 2024, which totaled ?148 tril on g oba ly, compared to the year before, ?luxury exper ences maintained aster- hanaverage growth as consumers continued to move their spending to travel and socia events?Look ng ahead, the study?s research ?suggests a s ight y mprov ng con ext throughout 2025? though th s s h gh y dependent on the un o d ng macroeconomic scenar os n key regions Looking toward 2030, the market wil ke y embark on a long-term pos ive tra ectory, with a growing addressable consumer base?
Across each of the fol ow ng markets, we observe d stinct patterns n how uxury property and goods evolve ogether In some regions, real estate investment precedes reta l growth, wh le in others estab ished luxury exper ences attract wealthy proper y buyers, demonstrat ng how these tw n markets ref ect and reinforce ocal wealth creat on ?
Top passion investments' made by luxury homeowners Sou ce 2025 M d-Year So heby?s Internationa Real y agen su vey
SPENDING HASSHOWN
CLAUDIA D?ARPIZIO,Bain & Companypartner
In Saud Arab a, the phrase ?giga-pro ect?
s f nd ng its way n o rea estate conversa ions as new urban and resort deve opments w th the potent al to change the concept of luxury iv ng take shape As recently as 10 years ago, luxury propert es n Saud Arabia had few amen ies, says Er ck Kna der, managing partner, Saud Arabia Sotheby?s n erna iona Realty ?But w th the country opening up and the Saud Vision 2030 nit at ve, coup ed with an
inflow of execut ves and foreign companies, demand for upscale developments with amenities has been on the r se?Saud Vis on 2030 s a mu t -year bluepr n to diversify he economy and create a dynamic env ronment for both local and internat onal nvestors Now n its second phase has sparked a number of other g ga-projects
A mass ve new development at Dir yah, near the cap ta R yadh, is ushering n a resh understanding o urban luxury ?Th s project s no ust a bu d ng,?
Kna der expla ns W th state-of-the-art infrastructure, branded and non-branded
h gh-end residences, commerc al spaces, restaurants, schoo s and un vers ties, it is bas ca y a c y w th n a city
?You never need to leave unless you?re go ng to the airport,?Knaider says ?Even the non-branded residentia componen s are built to a comp ete y d fferent standard Every brand under he sun w l be there, whether it?s Ritz-Car on, Raff es Baccarat or Corinth a res dences Even Aman s setting up a deve opment ?
Accord ng to Kna der wea thy Saud s are fami iar w th the assurance of wh te-glove service and the superior qua ity a brand de ivers H gh-net-worth
consumers br ngs m ar expectat ons to uxury goods A d vers ed economy s one aspect of the Saud V sion 2030 n t at ve that ?has led to a rise in luxury reta l spaces and increased opportunities for globa luxury brands to enter the Saudi Arabia market,?accord ng to a report published in December 2024 by Ken Research, a g obal market n e igence consu tancy
Just o f Saud Arab a?s west coas , a mass vedeve opment ca led the Red Sea Project s antic pated to ncrease tourism and make Saud Arab aa major g obal dest nat on by 2030 nformed by a deep commitment to act ve y restor ng and enhancing v ta ecosystems,the pro ect encompasses an arch pelago of more than 90 slands, 75% of which w l remain untouched When complete, this giga-pro ect w lcompr se 50 resorts It is,according to Kna der ?a one-ofa-k nd deve opment Nowhereelse n the wor d is a development of this scale be ng built that cons ders sustainab ity and regenerative tour sm,?he says ?It?s basically comp ling what you?ve got in St Barts, the Seychelles and the Maldives and putt ng them a l n one dest nat on? The init al five resorts are comple ed, w th an add iona 11antic pated n 2025 Res dent al offer ngs are expansive, d verse and invent ve,ranging rom eco- odges ch se ed into ancient mountain faces to stain ess-stee overwater pods that ref ect the sky and sea The aesthet c merges sustainab e,futur st c design w th Saud her ageand hosp tal y The cost of luxury propert es in these resorts ranges from US$14 m l on o US$110 mi ion, Knaider says Internat ona and domest c buyers are a ready showing nterest The pro ect ncludes an airport that provideseasy access to the MiddleEast, Asia,Europe and the Americas ?Ear y sa es have exceeded expectat ons,and the Red Sea isqu ck y becom ng oneof he most sought-after dest nat ons n the reg on,?Knaider says ?
With the world?s f fth largest economy, growing ncomes and a youthful population, Ind a s becom ng an ncreas ng y mportant part of the globa uxury landscape, accord ng to a report by INSEAD Know edge, the research arm of business schoo INSEAD, publ shed n January 2025 India?s luxury goods market
was worth an estimated US$17 b ll on in 2024, w h watches and ewe ry compr s ng the argest segment Th s figure s antic pated to at east r p e by 2030
Real estate appears to be pursu ng a s m lar trajectory, as demand for high-end propert es has surged in the past two years
In 2024, the luxury real es ate market was valued at approximate y US$45 b ll on and s projected to reach US$105 b ll on by 2030, accord ng to a report re eased n January 2025 by market research
company MarkNte Advisors ?The Indian economy s one of the fastest growing n the wor d and a buoyant cap ta market, and tech founders are cashing in on he equ ty added n 2024,?exp ains Akash
Pur , director of n erna iona bus ness, Ind a So heby?s In erna iona Realty
?Luxury l ving in India is characterized by pr me locations, expans ve layouts and prem um amenit es?Puri says A key trend for 2025 w l be the grow ng demand for trophy and bespoke uxury assets, particular y spac ous farmhouses and gated v las in h ll and beach destinations
Areas hat cons stent y record the highest prices per square foot nclude Lutyens?Delhi, an exclus ve enc ave in New De h , the capital, p anned by the Br tish architect Edw n Lutyens between 1912 and 1932 The ne ghborhood is synonymous with luxury and is home to the offic al residence of the coun ry?s president and many o her government bu ldings E te buyers in De hi also look to he b end of her tage charm and modern amen ties offered by Jor Bagh and Go f Links (the De h Go f C ub is nearby). Two other neighborhoods renowned for upscale residences Vasant V har and Shanti
Nike an, are popu ar among diplomats and expatriates
According to UBS?s 2024 B liona re Ambit ons Report the country?s richest people have seen a stagger ng 42% surge in their col ect ve wea h n recent years
Over the past decade, India?s b liona re count has more than doubled? to 185? and the r co lec ive wealth has jumped by 263% to US$905 6 b ll on
In add t on to New De h , severa c t es are experiencing steady demand, Pur says The most prom nent s Mumba the country?s wea thiest c y and its f nancia cap tal Demand for luxury deve opments
sant cipated to rema n stable in the tech hub of Bengaluru (formerly known as Banga ore)
Upscalehomebuyers are seek ng more than pr me ocat ons Accord ng to Puri,luxury buyer preferences n Ind a nclude amen ties such as advanced secur y systems,home automation and we ness fac lities Another draw is access to open greenspaces as we as a grow ng emphas son eco-friend y des gns and energy eff ciency As a ways, finding a res dencethat offers ab end o pr vacy and community sa so akey considerat on for wealthy buyers ?
When Puerto Rico Sotheby?s Interna iona Rea ty opened its doors in 2012,the highest sa e on he is and was ust over US$2 mi lion In 2021,by contrast,the off ce se
a new record for the island w th a US$30 mi lion waterfront property in Dorado Beach,a R z-Carlton Reserve In 2024, the company achieved the sale of a US$13 4 mi lion penthouse n Condado Beach, San Juan,and set a new record for he area
This a igns with growth in the uxury goods market on he is and,w th revenue from this ndustry orecasted to reach US$533 44 mi lion in 2025,and grow annually by 3 06%,accord ng to a September 2024 report by Statis a Market Ins ghts
Margaret Pena Juvel er founder and president, Puerto R co Sotheby?s International Realty, exp ains the island?s growing appeal ?Everyone speaks both Spanish and Eng sh, wh ch s wonderfu It?s dol ar-based It?s U S -based All the federal aws apply here so it?s very safe And we have everything: arts, culture, a ba let company,a symphony orchestra
Because of all hat, t s a much more n eresting s and We had an except onal 2024, having surpassed our volume for 2023 by the third quarter In the rst quar er of 2025, we had 19 transact ons under contract. We are see ng strength and buoyancy n the luxury property market, and ts scope has grown tremendous y n terms of both locat ons and buyer profiles?
The luxury property market begins a around US$2 mi lion and c mbs to above US$40 m lion,Juve er says ?I hink real estate developers?and buyers?expectations have evolved n the ast 10 to 15 years We have seen broader demand and expansion of where on the sland people wou d cons der iv ng?
In addition to traditiona resorts such as the Ritz-Carlton at Dorado Beach or
the St Reg s a Bahia Beach, buyers are look ng further afie d ?Some are choosing what to buy based on ifes y e,?says Juve er, po n ing o a US$6 mi ion custom-bu t house on a horse farm in a moun a n sett ng with water views Ten years ago, she says, ?you would never have seen anyone cons dering someth ng outside o a traditional gated resort ?
H storically, U S buyers have dom nated luxury sales, largely thanks to tax bene ts and easy access Now, Juve er says, Puerto Rico is becom ng an international destinat on both for vacationhome buyers and a growing number of others search ng for ong-term res dences P ans for severa new communit es under development w ll cater to both markets
Moncayo,on he east coast of the island near Puerto del Rey,a boater haven with the Car bbean?s largest mar na,w l consist of a town center,a 400-acre na ure preserve,a 100-acre organ c farm a go f course and a private club,in addition to v l as and private residences from Auberge Resorts A so being planned s another mega deve opment,Esenc a,on more than 2,000 acres on the is and?s wes coast P ans cal for two go courses,an equestrian center and a b l ngual K-12 schoo The plan wi l be imp emented in f ve phases, with the f rst expected to be comp eted three years af er start ng construct on ?
Source Puerto R co So heby?s Internat onal Rea y
Start ng pr ce for uxury homes
US$2 million
Start ng pr ce for super-luxury homes
million
Summi Sotheby?sInternational Rea ty
Starting price for uxury homes
Starting price for super- uxury homes
When res dent al sales of US$15 m l on are no longer the exception and US$2 mi ion s an entree to the upsca e market, a reg on?s luxury status is unquestionab e Since January 2025, there have been 15 sa es over US$15 m ll on in Utah, a record for the state, accord ng to Kerry Oman, global rea estate advisor, Summ t Sotheby?s Internat onal Rea y Compare that to 2024, when there were on y 18 transactions of more han US$15 m ll on for the entire year
The most expens ve sa e as of April 2025 was a home that was l sted for US$32 m ll on at the Colony at Wh e Pine Canyon, one of Park City?s h ghest-pr ced neighborhoods; Michae LaPay, globa real estate adv sor,
Summit Sotheby?s Internationa Realty, worked with the buyers
U tra- uxury in Utah, especia y Park C ty takes the concept of amenit es to a new leve with private ski if s c imbing wal s, indoor sports courts, extens ve wel ness features and the odd helipad Extens ve compounds can sometimes exceed 70,000 square feet o interior space One of Oman?s current l stings, priced at US$35 m lion, features two bunkrooms (à la Swiss Fami y Robinson), a repl ca o D sneyland?s famed Enchanted Tik Room bar and a tunne connect ng the main house to a mass ve pool barn Oman estimates that the average price of a luxury property in the Sa t Lake Va ey is now US$3 mi lion From March 2024 to March 2025, there were 124 sa es between US$2 m lion and US$3 mi lion in he city and nearby suburbs, a 53%
year-over-year increase During the same period, 39 homes sold for over US$3 m l on and seven for over US$5 mi ion, w th US$75 mi ion be ng the highest price Just before the end of 2024 a US$65 m l on chale n one of Deer Valley?s most exclus ve ne ghborhoods, Deer Crest, so d w thin four days, Oman says In nearby Park C ty, US$10 m ll on is the thresho d for the upscale market, and inventory is ant cipated to grow as an extensive expansion of Deer Valley?s east s de cont nues However, ski-in/ski-out ga ed commun ties such as the Co ony at White P ne Canyon and Deer Crest remain the prime uxury locations Oman adds Park City m gh reign as he premier upsca e area, but Utah luxury covers a broad sweep of land between the Oqu rrh and Wasatch Mountains a ong the Sa t Lake Valley In add tion to Salt Lake
C y?s rad tiona luxury addresses a ong the Eas Bench, Federal Heights, the Avenues and Holladay, upscale homes and new luxury ne ghborhoods can be found in Draper, Herr man and A p ne Wha brings buyers o Utah? Outs de observers of en at r bute the growth of luxury property n Sa t Lake C ty to an inf ux of tech money from entrepreneurs and companies such as Adobe,Ancestry, C ear ink,Qualtrics,Vivint and others In recen years,parts of Salt Lake Val ey have been dubbed Si icon Slopes Oman recent y l sted a US$17 m ll on European-s y e es ate in the Provo-Orem area that s the former home of Bruce Bast an,one of Utah?s or gina tech legends,who founded ear y tex -editing so tware firm WordPerfect But he state?s appeal stretches beyond the tech ndustry, according to Oman ?Utah has a tremendous economy,
and peop e are com ng here for d verse reasons,?he says These inc ude the cost of homes compared to other markets, ease of access, year-round recreat on cu ture, he arts, educat on and access to exce lent hea hcare ?It?s certain y dr ven by a lot of wea th er C-su e buyers, but I also see many doctors, researchers b omed cal eng neers and nd v dua s w th manufacturing and construction backgrounds,?he adds In the 2000s, Utah became a top ocat on for ndustrial banks and a growing financia serv ces sector continues to attract newcomers Known for ts beautiful mounta n backdrop, Salt Lake C ty in Utah was among the cit es highl ghted n Henley & Partners USA Wealth Report 2024 as a ?future wealth hub?? a d stinction t earned through ts reputat on as one of
US$10 million US$2-3 million
Amer ca?s ?east-stressed city,?w h festyles centered around an abundance of ways to p ay outdoors,from skiing and riding to fly-fish ng, bik ng and rock c imb ng It is rising n popular ty as a base or tech and financial star -ups ?U ah isa grea place o raise famil es,?says Oman ?It?s dr vennot so much by the typesof jobs peop e might have but by the ifes y e they can have here One of the biggest feeder markets are people w th ties o Utah?Cal forn a has alwaysbeen a sign cant state for ncom ng residents, along w th Arizona, Texas and the Pac f c Northwest Now, Utah?s pu l extends to F orida and New York ?And then t sp ls over to al the other states,?says Oman ?
Not so long ago, reports from San Franc sco, Cal forn a,deta ed the flight of retailers rom the downtown area Today, prev ously vacant stores are be ng occup ed by brands that cater to the u ra-wea thy, transform ng Union Square into a premier destinat on where shopp ng by appointment and pr me European reta lers are the norm, accord ng to a February 2025 report from rea estate data company CoStar
It?s not ust high-end retai ers tha have the r sights on he city An Apri 2025 report from B oomberg, among others, shows growing nterest and purchases of commercia properties from a range of b g names ncluding Go den S ate Warriors?star Stephen Curry, Google?s Sergey Brin and we -cap ta ized nvestment groups On the resident al side, agents are seeing growing demand for ultra-h gh-end propert es ?There s renewed confidence and momentum n San Franc sco, particu arly a the top end of the market,?says Ne l Bassi, globa real estate adv sor,Sotheby?s International Realty - San Franc sco Brokerage. ?One of the things that def nes
San Francisco rea estate s that it?s a momentum market, energized by the belie that tomorrow is go ng to be better han yesterday There was a ittle bit of a u l for a short t me, but if you ask anyone who?s buy ng today, the r confidence is ultra-h gh?
Bassi spec alizes in sing e-family homes w thin he city proper, where US$7 m ll on to US$8 mil on is the thresho d for uxury and the ultra-h gh market starts at or above US$20 m lion ?In 2024 we had more sa es over US$20 mil on recorded in a s ngle calendar year than ever before,? he says A transac ion ed by Bass a US$30 mil ion estate in Sea Cliff, has already set a record this year, as of Apr l 2025 ?If you look at the sa es nor h of US$20 m ll on last year, you?l see some that are on doub e lots, fully renovated with n the last 10 years or sooner, with big views Then you? l see others that are long-term, mu t -year renovat on pro ects in a once-in-a-generation ocat on.?
Buyers today nclude former res den s of the city who are returning after a h atus of four or f ve years a ong w th newcomers drawn by the c ty?s tech indus ry. Un ike the last surge of newcomers, who were drawn to Sil con Va ley, those new to the city are apt o ook north to Presidio Heights and Pacific Heights
THERE IS RENEW ED CONFIDENCE AND MOMENTUM IN SAN FRANCISCO, PARTICULARLY AT THE TOP END OF THE MARKET
NEILL BASSI gobalreal estate advisor, Sotheby?sInternational Realty - SanFranciscoBrokerage San Francisco s aplace to create wealth and also to l ve a full,r ch l fe Bassi says Educat on, proximity to op un vers t es,access to cultura amen ies likethe opera and bal e ,innovat ve tech ecosystems and healthcare are a essent als ?For the ultra-h gh-net-worth cl ent, there sa real va ue propos t on to comm t to ra s ng a fam ly here,?he adds Property isstill the ultimateluxury
At a t me when demand for some luxurygoods issoften ng,rea estate te lsa d fferent story In San Francisco, luxurybrands are eading arevival of the high-end market In Puerto Rico,new resorts arebr nging innovat ve concepts that br dge ifesty es? from hote s to residences? andin Saud Arabia nspired urban p anning s showcasing new prototypes for luxury Ind a?s thriv ng economyis driving demand for upscale properties,and in Utah,luxury scoming down from the peaks to a broad sweep of va ley extending from Sa t Lake C ty Al these changes not only show where new hubsfor uxury rea estate areemerg ng or reviv ng, but they a so providec ues to the r future evo ut on. -
In addition to nterna market data from the Sotheby?s Internat onal Rea y brand and its affil ates, this report c es the follow ng data sources and art cles: Welcome
P4, Rea tor com® ?H gh-End Housing Market T ends and Outlook,?Apri 9 2025
An Eye on the Market
P8, The New York Times, "U S n ation Rema ns Muted W th L m ted Effects F om Ta ffs " June 11 2025
P8, ?Ou pe ormed the market? c aim based on So heby?s n erna ona Rea ty?s 2024 per ormance versus So heby?s n erna ona Rea ty?s 2023 per ormance wh ch resu ted n a 9 4% ncrease In compar son, NAR?s overa 2024 marke pe ormance versus NAR?s overa 2023 market per ormance resu ted n a 5 2% increase NAR?s market per ormance based on report: ?NAR Ex st ng-Home Sa es?re eased December 2023 and December 2024
P9, The Wal Stree Journa , ?The U tra Wea hy Are R ding Out he Market Chaos n Luxu y Rea Es a e?May 15 2025
P9, Rea to com® ?H gh-End Housing Market T ends and Outlook,?Apri 9 2025
P10, J P Morgan ?The Ou ook or the US Hous ng Market n 2025,?February 10 2025
P10, UBS, ?G oba Rea Esta e Bubb e ndex Sep embe 2024? September 23, 2024
P10, The Wa Stree Jou nal ?America?s Richest 10% Now Account or Nearly Ha f o A Consumer Spend ng? February 24, 2025
P10, AP News, ?Wal Stree R ses Aga n As the S&P 500 Erases ts Loss for 2025,?May 13, 2025
P13, The New Yo k T mes, ?How Wou d We Bu ld Homes W thout mm grant Labo and Fo e gn Ma er a s??Apri 4, 2025
P14 Na ona Assoc ation o REALTORS®, ?Home Buyers and Se ers Generationa Trends Report ?Apr 1, 2025
P18 B oomberg, ?Go ng, Go ng, Gone UK Non-Dom Ex ts Qu cken After Tax Perk Ends?Apr 6,2025
P23, B oomberg, ?Dubai Adds New $100 Mi l on Mans ons To Lu e Wor d?s U ra R ch,? February 2 2025
P23, Na ona Assoc at on o REALTORS® ?The Hous ng nven ory s Here? Where A e the Buyers??May 29 2025
Steady Course
P25, Rea tor com® ?High-End Housing Market Trends and Out ook,?Apri 9 2025
P25, Nat ona Associat on o REALTORS®, ?Summary o March 2025 Exis ng-Home Sales S atis cs,?Ap 24 2025
P25, AP News, ?US And Ch na Reach a Dea To S ash Sky-H gh Ta ffs for Now W th a 90-Day Pause,?May 12, 2025
P25, The New York T mes, "U S n lat on Rema ns Muted W th L mi ed Effects From Ta ffs " June 11 2025
P25, The Wa S eet Journa , ?US Do a Index (DXY) ? June 18 2025
Recovery Ef or s
P29 ABC News ?LA F res Afte math How Peop e A e Rebu ding A ter Los ng A mos Everyth ng?March 7, 2025
P29, AP News, ?UN Specia Envoy Jul e B shop Makes Tr p to War-Torn Myanma A er Devasta ng Earthquake,? Apr 10 2025
P29, Munich Re, ?Cl ma e Change s Show ng Its Claws The Wo d Is Gett ng Hotter Resu t ng n Severe Hurricanes, Thundersto ms and F oods,? January 9 2025
P29, Nat onal Cen ers for Env ronmen a n ormation ?2024: An Ac ve Year of US B l ion-Do ar Weather and Cl mate D saste s? January 10 2025
P29, Bank o Amer ca Insti ute, ?Homebuyer ns gh s Report,? May 28, 2025
P30, Hous ngW re, ?Pal sades A tadena P ope y Va ues Are Ac ual y Soar ng Pos -W ldf res,? March 4, 2025
P31 F rst S reet, ?C ma e Dr ven Populat on Sh fts and nsurance Increases A e Se To Erase $14 Tr l ion n American Rea Esta e Value,?February 3 2025
P32 Los Ange es T mes, ?Lessons From the Bu n Zone Why Some Homes Surv ved The LA W d res,?January 17 2025
P32 Los Ange es T mes, ?Rea Estate Losses From F res May Top $30 B l on, From Old Mob e Homes to $23-Mi on Mansions,? February 21 2025
P32 The Wa l S reet Journa ?Why he Megar ch Ins st on Buying Homes n Extreme Weather Zones,?Apr 1 2025
P32 Hen ey & Partners, ?Amer ca?s Fas es -Grow ng M l onaire Hubs,?March 19, 2024
P34,Hous ngWire, ?Wha Post-Hurricane Data n No h Carol na Cou d Mean for Florida?s Recovery?October 23 2024
Luxury Rena ssance
P40 McK nsey & Company, ?The S a e of Luxury How to Nav gate a Slowdown,?January 13,2025
P40 Bain & Company ?G oba Luxury Spend ng o Land Near ?15 Tr on n2024, Rema ning Re ative y F at As Consumers Pr or t ze Exper encesOver Produc s Am d Uncer a n y? November 13, 2024
P40 Bain & Company and Fondaz one A tagamma ?Luxury n Trans t on: Secur ng Future Grow h,?January 17,2025
P40 Ken Research, ?KSA Luxury Goods Marke Out ook to 2028,? December 19 2024
P43,Insead Knowledge ? s India he Next G obalLuxu y Hub?? January 6 2025
P44, MarkNte Adv sors ? nd a Luxury Res den a Rea Es ate Market Research Repor Forecast (2025-2030),? January 2025
P45,UBS, ?B l ona re Amb t ons Repor 2024?March 19, 2025
P46, Statis a ?LuxuryGoods? Puerto R co?September 2024
P49, Hen ey & Partners ?Amer ca?s Fastest-Growing M ona re Hubs?Ma ch 19 2024
P50, CoSta News, ?Luxury Meets D s ress nSan Francisco?s Prem er Shopp ng D str ct,? February 3, 2025
P50, B oomberg,?B iona res and CEOs Bet on Cheap San Franc sco RealEs ate,? Apri 16, 2025
