The nation's luxury homebuying market has been strong so far this year and is showing no signs of cooling, according to research from two real estate brokerages.
The luxury markets in Columbia, Dutchess, Putnam and Westchester counties of New York, and Fairfield County, Connecticut, saw prices grow and buyer demand soar in the second quarter, according to Houlihan Lawrence. Luxury buyers in the northern suburbs of New York City want properties that offer large spaces and privacy, the brokerage said. Other major metropolitan areas — including Aspen, Colorado, and San Francisco — are also showing strong luxury homebuying activity, Sotheby’s International Realty said.
"Despite elevated borrowing costs, buyers continue to show strong demand for properties priced at $2 million and above, with the upper end of the market holding steady, particularly for well-maintained, turnkey homes," Houlihan Lawrence CEO Liz Nunan said in the firm’s second-quarter report.
In real estate, the luxury home market refers to homes priced above $1 million or in the top 5% of prices in a given housing market. Luxury homes are also defined as properties with premium amenities, such as an in-ground pool or home theater, or homes that sit in exclusive sections of a city. The luxury market runs opposite to an area's starter, or regular, housing market, where homes and prices cater to lower-income and middle-class Americans.
In New York’s Westchester County, luxury buyers are flocking to homes that cost $3 million and up with updated interiors and short distance to mass transit, Houlihan Lawrence said. The number of luxury homes sold in Westchester grew nearly 14% year over year in the second quarter, and the most expensive property sold was in Harrison, New York, at $13.5 million, according to Houlihan Lawrence data.
Ancram and Canaan, New York — two towns in Columbia County — are quietly becoming new luxury home destinations, the brokerage said in its report. The median sales price for Ancram grew nearly 19% year over year to $575,000 in the second quarter while, in Canaan, the median price hit $585,000, a nearly 1% drop from a year ago, according to Houlihan Lawrence.
Homebuyers are grabbing luxury properties at a healthy clip even as mortgage rates continue to climb. Interest rates will fluctuate and change buyers' behavior, but there will still be "healthy activity" for luxury homes in the months ahead, Nunan said.
"Looking to the second half of 2025, the luxury market is expected to remain competitive for homes that align with buyer expectations," she said. "Modern updates, desirable locations, and outdoor living features remain top priorities."
But suburban New York City is just one locale where luxury is growing.
In a midyear report focused on luxury homes, Sotheby's said wealthy individuals are continuing their trend of buying properties with cash to avoid worrying about fluctuating mortgage rates. High-income earners see real estate as a solid place to spend their money at a time when the U.S. economy is experiencing tariff impacts and inflation, the report concluded.
“Ultra-high-net-worth individuals continue to view real estate as an essential portfolio component,” Sotheby's CEO Philip White said in the report. "Even amid economic uncertainty, the resilience of the luxury housing market provides compelling opportunities for strategic homebuyers and sellers."