Luxury Home Sales Hit a Decade-Low in August Amid Market Slowdown

A new Redfin report reveals that while luxury home prices in August reached a record high of $1.25 million, reflecting a 3.9% year-over-year increase, luxury home sales are seeing their weakest performance in 10 years. This marks the lowest level of sales for the month of August since Redfin began tracking data in 2013. Despite a slight increase in prices, the luxury segment of the housing market is still feeling the impact of economic uncertainty and changing buyer behavior.

A Closer Look at Luxury Home Prices and Sales

The luxury market had a standout moment in March 2025, with home prices reaching $1.35 million, the highest on record for any month, but August saw a decline of 7.4% from that peak. While luxury home prices continue to grow faster than non-luxury homes, the sales numbers tell a different story. For the second consecutive year, sales have fallen.

In August 2025, luxury home sales declined by 0.7% year-over-year, while non-luxury home sales dropped by 0.6%. This marks the lowest August sales levels since records began, with a clear cooling in the market for high-end properties.

Despite this, pending sales in the luxury sector showed signs of stability, with a 0.1% increase year-over-year. This was a small but notable shift, indicating some potential stabilization ahead. In contrast, pending sales in non-luxury homes showed no significant change, falling 0.1% year-over-year.

A Buyer’s Market: Slow Sales and Longer Days on Market

Sellers in the luxury segment are facing extended selling times. Luxury homes typically took 46 days to sell in August 2025, which is three days longer than the previous year. Only 28.3% of luxury homes went under contract within two weeks, a drop from 30.2% in 2024, which indicates that buyers in the high-end market are particularly slow-moving.

The non-luxury homes segment also saw longer selling times, with properties taking an average of 40 days to sell, up from 33 days last year. The share of homes that went under contract within two weeks fell from 38.6% to 34.4%, reflecting broader trends of slower decision-making across the market.

Rising Inventory and Limited Price Reductions

Inventory in the luxury segment is also rising. The total number of luxury homes on the market jumped 9.5% in August 2025 compared to the same month last year, marking the highest level of luxury inventory since 2020. However, the rise in inventory has not been accompanied by an increase in new listings for luxury homes, which remained relatively flat at 0.2%.

Price reductions have been relatively rare in the luxury market, with 13.3% of homes priced over $1 million seeing price cuts, compared to 21.6% of homes in the $350,000 to $500,000 range. This signals that luxury sellers are holding firm on their asking prices, despite slower sales, rather than engaging in widespread price reductions.

Regional Breakdown: Luxury Home Market Trends

Price and sales trends in the luxury market varied significantly across different regions in the U.S.:

• West Palm Beach, FL saw the biggest price increase of 15%, with the median sale price reaching $4,004,687.
• New York experienced a 12.3% increase in luxury home prices, bringing the median price to $4,138,603.
• San Francisco saw luxury home sales increase by 13.9%.

On the flip side, some markets are struggling:

• West Palm Beach, FL also experienced the largest drop in sales, falling 27.8%.
• San Jose, CA saw a 24.4% decline in luxury sales, and Miami, FL had a 19.4% decrease in sales.

The Changing Definition of Luxury

The definition of what qualifies as a “luxury” home has also shifted in recent years. According to Realtor.com’s “What Is Luxury?” report, the threshold for a luxury home has increased dramatically since 2016, when homes priced at $796,922 were considered luxury. Today, the price point for a luxury property is closer to $1.3 million. In many markets, a $1 million home no longer signifies luxury status and may instead be considered part of the high-end of the general market.

“While a million-dollar home still represents an important benchmark, it’s not the luxury marker it once was nationwide and in many markets,” said Danielle Hale, Chief Economist at Realtor.com. “With home prices having risen dramatically, the definition of luxury has shifted considerably over the past decade. What is considered a luxury home in some regions today might have been the norm in others just a few years ago.”

Conclusion: A Slower, Cautious Market for Luxury Homes

The luxury home market, while still commanding high prices, is slowing down. Luxury home buyers, many of whom are less dependent on mortgage rates and may have the flexibility to make purchases in cash, are becoming more cautious. With economic uncertainty, high prices, and a cooling economy, these buyers are increasingly waiting on the sidelines for more favorable market conditions. Sellers in the luxury market are more reluctant to lower their prices, leading to longer days on market and stagnant sales.

As the market adjusts to these trends, buyers and sellers alike will have to remain patient. For now, while prices continue to rise, the luxury market remains in a holding pattern with some regions seeing steady demand while others experience price stagnation and sluggish sales. For prospective buyers, the shift toward a buyer’s market could present new opportunities, particularly for those willing to wait for the right moment. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.