Luxury remains one of the most resilient segments of real estate, seeing continued success and some new developments leading to potential growth, according to a new report from Sotheby’s International Realty®.
Sotheby’s 2026 Mid-Year Luxury Outlook noted that despite overall challenges to the housing market, luxury real estate continues to perform relatively strongly, with more potential for growth on the horizon.
The report specifically noted that 55% of the real estate professionals surveyed who specialized in luxury have observed an increase in luxury homebuyers in their markets throughout the past 12 months, coupled with average price increases of 5%.
“What we are seeing in the industry is not a short-term change, but a sustained shift in how global wealth is stored, transferred, and expressed through property,” said Philip White, president and CEO of Sotheby’s International Realty®, in a statement. “It underscores a simple reality: While motivations are changing, prime real estate can be one of the most trusted ways people preserve and express wealth.”
In this continued growth of luxury, Sotheby’s reported that there has been an increase of millennial luxury homebuyers, a generation that has widely been seeing lock-out across the housing market. The report stated that 73% of those surveyed who work in the $5-million-and-up price bracket in the U.S. said there were more millennial homebuyers in their markets.
Lifestyle considerations also remain a large proponent for luxury homebuyers, with 62% of survey respondents reporting this as a key factor. Most notably, the report stated that homebuyers are considering longevity within this lifestyle consideration.
The report found that nearly 38% of real estate professionals working in the $10-million-and-above segment said that aging in place has become a growing factor for homebuyers. Another stat also called out is that, according to UBS Global Wealth Management, the global longevity market is projected to grow from $5.3 trillion in 2023 to $8 trillion by 2030.
Other notable considerations for luxury homebuyers consist of taxes at 60%, economic stability (53%) and political stability (49%).
The report also noted how changes in tax policy—specifically the expansion of State and Local Tax (SALT) deductions under the One Big Beautiful Bill Act—may be a potentially positive influence on the luxury market in months to come.
Quoting the National Association of Realtors® Chief Economist Lawrence Yun, the report said that this change “will likely increase purchases of high-end residences in states with high property tax rates, such as New Jersey, Connecticut, Massachusetts and New York.” However, the ultra-luxury housing markets may not see this growth as the deductions are phased out for taxpayers with an adjusted gross income of $500,000 or higher.
“As people filed their income tax returns in April, they found they could reduce their tax bill with SALT deductions,” Yun explained in the report. “They have extra money in their pockets and may be encouraged to buy a larger home when they realize they can deduct more of their property taxes.”
