As we close the books on August, the Institute’s Luxury Market Report takes a closer look at the current luxury real estate market.
The luxury real estate market across North America continues to walk a fine line between strength and restraint.
August 2025 highlighted this balance with a familiar seasonal dip in sales compared to July, yet year-over-year activity proved strong—evidence that affluent buyers remain committed players.
The difference now lies in how buyers and sellers are approaching the market, and these nuances matter for professionals navigating the months ahead.
Buyers intentional, sellers restrained
Buyers are still active, but with a heightened sense of purpose. Lifestyle, convenience and value alignment are driving decisions more than ever. In contrast, sellers have grown cautious, limiting the pace of new inventory. This push-pull between resilient demand and measured supply is shaping opportunities for agents and brokers.
Adding complexity, mortgage rates are trending lower. While wealthy buyers may not rely heavily on financing, reduced borrowing costs can free capital for other investments and broaden buyer pools. For real estate professionals, this could mean a potential uptick in demand, but also the need to manage seller expectations carefully.
Single-family homes: Strong demand, controlled supply
Single-family homes continue to anchor the luxury market. August sales rose 6.7% year-over-year, outpacing both 2024 and July 2025. Yet, inventory expansion slowed dramatically, with new listings up just 2.5% compared to a 21% surge the year before. Sellers may be holding back, waiting for what they believe could be more favorable conditions.
For professionals, this environment calls for proactive engagement. Advising sellers on the risks of waiting too long, while guiding buyers through declining rate of new inventory, will be key. With rates easing, positioning homes now could capture early demand before competition intensifies.
Condos and townhomes: A narrowing gap
While still lagging single-family homes, attached luxury properties are showing stabilization. Sales fell only 0.4%, a sharp improvement from the steeper declines of 2024 and July 2025.
Inventory is growing, but new listings barely increased, indicating seller hesitation here as well.
This presents opportunity. Younger professionals and downsizers are likely to re-engage as financing costs drop, drawn to the convenience and amenities condos and townhomes offer.
Agents should be ready to market lifestyle benefits such as security, low maintenance and urban access, while helping hesitant sellers see the upside of listing into renewed demand.
Buyer trends: Lifestyle as currency
For today’s affluent buyer, the real measure of luxury is not size, or in many cases the price, but the lifestyle it affords its owner. Waterfront retreats, ski-in chalets or amenity-rich city condos are sought as gateways to experience. Time and value for money are also premium: move-in-ready homes with high design and smart tech features remain the strongest draw.
Generational dynamics add further layers. Millennials and Gen Z buyers prioritize sustainability, smart-home integration and investment potential. Boomers and Gen X continue to seek convenience, security and cultural access.
For professionals, tailoring strategies to these generational preferences will be critical in building trust and closing deals.
Seller trends: Strategy over speed
On the supply side, patience is defining the market. Sellers are holding back inventory, calculating that timing may yield stronger returns. Pricing strategies are sharper as well – although sellers should recognize that buyers are still rewarding turnkey properties aligned with lifestyle priorities, while homes without these elements risk being overlooked.
For brokers and agents, guiding sellers toward realistic value alignment and preparation is essential. As rates decline, seller psychology may shift again. Some will see it as the right time to list; others will wait longer, betting on stronger demand. Professionals who can read these motivations and advise accordingly will have an edge.
Looking ahead: refinement, not imbalance
The luxury market is not unbalanced, it’s refined. Buyers remain engaged, and sellers deliberate. The months ahead hinge on whether falling mortgage rates release more inventory or reinforce restraint.
Agent takeaways:
- Position sellers strategically: Encourage preparation and value alignment now, before competition grows.
- Highlight lifestyle, not just luxury: Showcase how homes deliver convenience, sustainability or unique experiences.
- Watch the condo market: Stabilization and lower mortgage rates are creating opportunity, especially with younger buyers and downsizers.
- Segment by generation: Tailor your approach to connect. Millennials/Gen Z want smart, sustainable, investment-ready homes, while Boomers/Gen X focus on security, convenience and cultural access.
- Read the local momentum: National trends provide the backdrop, but local dynamics drive decisions. Monitor inventory flow, buyer demand and rate shifts in your market to guide clients with precision.
To read the full report, visit here.
