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Inventory Constraints Fuel Selective Bidding<\/p>\n
The median sale price of a luxury home in the United States climbed 4.6% from a year earlier to $1.31 million in December, significantly outpacing gains in the broader housing market, where non-luxury prices rose just 1.4% to $375,000 — the slowest rate of appreciation recorded since tracking began in 2013.<\/p>\n
Price declines at the high end were rare, with only two major metropolitan areas — Fort Worth, Texas, and Portland, Oregon — posting year-over-year decreases in luxury home values.<\/p>\n
The figures are based on a Redfin analysis of Multiple Listing Service transactions covering the October-through-December 2025 period, which the firm refers to as “December” data. All metrics represent rolling three-month averages aligned with the fourth quarter and remain subject to revision. Redfin classifies luxury homes as those within the top 5% of a metro area’s estimated price distribution, while non-luxury homes fall between the 35th and 65th percentiles.<\/p>\n
Selective Demand, Limited Supply<\/p>\n
Rising luxury prices appear to be driven less by broad-based demand and more by constrained inventory of highly desirable properties, according to Alin Glogovicean, a Redfin Premier real estate agent in Los Angeles. Elevated mortgage rates and already-high valuations have made buyers — including affluent households — increasingly selective, concentrating competition on a narrow band of listings that meet exacting standards.<\/p>\n
Well-located, move-in-ready homes are still attracting multiple bids and, in some cases, all-cash offers with waived contingencies. Sellers of premium properties in prime neighborhoods can command sizable premiums above asking prices, while less compelling listings face longer marketing times.<\/p>\n
Pending Sales Slip as Market Momentum Softens<\/p>\n
Signs of cooling momentum are emerging beneath the surface of headline price gains. Pending luxury home sales fell 1.1% year over year in December, marking the steepest decline in six months. Pending transactions for non-luxury homes declined 0.6%, the largest drop in eight months.<\/p>\n
Closed sales — a lagging indicator of demand — showed modest resilience at the top of the market, with luxury transactions edging up 0.4% from a year earlier. By contrast, completed sales of non-luxury homes slipped 0.7%.<\/p>\n
Inventory Growth Slows<\/p>\n
Supply conditions also point to a market losing some forward momentum. Active listings of luxury homes increased 5.6% from a year earlier, the slowest pace of growth since April. Non-luxury inventory rose 7%, also representing a deceleration and the weakest expansion since early 2024. Analysts attribute the moderation in new supply partly to subdued buyer activity and seller hesitation.<\/p>\n
New luxury listings rose 2.9% year over year, while new non-luxury listings declined 2.4%, underscoring a widening divergence in seller behavior between market tiers.<\/p>\n
Homes Take Longer to Sell<\/p>\n
Marketing times lengthened across both segments. The typical luxury home that went under contract in December spent 64 days on the market, five days longer than a year earlier and the slowest December pace since 2020. Non-luxury homes moved more quickly but also slowed, taking a median 50 days to secure a contract — six days longer than the prior year and the slowest December since 2019.<\/p>\n
Regional Divergence Widens<\/p>\n
Performance varied sharply across major metropolitan areas:<\/p>\n
Prices: Luxury values posted the strongest gains in Milwaukee, Orlando, and Nashville, while Fort Worth and Portland were the only large metros to register declines.
\nPending Sales: West Palm Beach, San Francisco, and Tampa led increases in luxury pending transactions, whereas San Jose, Philadelphia, and New Brunswick recorded the steepest drops.
\nActive Listings: Inventory expanded most in Tampa, Detroit, and Nashville, while San Jose, Philadelphia, and Milwaukee experienced the largest contractions.
\nNew Listings: Detroit, Kansas City, and Tampa saw the biggest influx of new luxury properties, while Milwaukee, New York, and Warren, Michigan posted the sharpest pullbacks.
\nSpeed of Sales: Luxury homes sold fastest in San Jose, Oakland, and St. Louis, and slowest in Miami, Fort Lauderdale, and West Palm Beach.<\/p>\n
Taken together, the data depict a bifurcated housing landscape in which headline luxury price gains mask softer transaction volumes and lengthening sales cycles. The upper tier of the market remains supported by wealth concentration and cash-heavy buyers, but constrained inventory and heightened selectivity are increasingly shaping outcomes city by city.<\/p>\n