Luxury Real Estate 2025: Resilient Demand Amid Market Uncertainty
Despite global volatility, luxury real estate remains a preferred asset class for high-net-worth individuals (HNWIs). Its appeal as a hedge against inflation, paired with constrained inventory, continues to drive demand and price growth globally.
According to the 2025 Luxury Outlook Report by Sotheby’s International Realty, the brand reported US$157 billion in global sales for 2024, with U.S. growth at 9.4% outpacing the broader market’s 5.2% growth. Cash buyers remain particularly active, steering demand even as other segments face volatility. From February to May 2025, sales of properties priced above US$10 million surged: Palm Beach (+50%), Miami (+48%), Aspen (+44%), Beverly Hills (+33%), Los Angeles (+29%), and Manhattan (+21%). The Wall Street Journal, analysis of US$10 million+ property sales between February–May 2025
Record-breaking deals reinforce this strength. In March 2025, Dubai Sotheby’s sold a villa on Jumeirah Bay Island for US$90 million, outperforming its 2024 record. That same month, Italy Sotheby’s conducted the country’s priciest residential sale ever—a 28-bedroom villa in Sardinia for US$172.8 million.
Top Concerns for 2025 Buyers
Based on the 2025 Mid-Year Sotheby’s International Realty Agent Survey:
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37.2% Economic stability
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27.5% Interest rates
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13.7% Political climate
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12.8% Environmental issues
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8.8% Tax reform
Buyers remain cautious about inflation, interest rates, and geopolitics. Yet, demand continues for well-positioned properties offering distinctive amenities, privacy, and lifestyle benefits. As Philip A. White Jr., CEO of Sotheby’s International Realty, observes: “When the right property appears, buyers act—regardless of market noise.”
Policy Impacts & Market Dynamics
The New York Times estimated in April 2025 that fully enforced tariffs and stricter immigration limits could elevate labor costs by 16% and materials costs by 31%. Meanwhile, Robert Dietz of the NAHB notes tariffs could increase construction costs by up to US$10,000 for typical single-family homes, with more pronounced effects on high-end builds.
Further, rebuilding after natural disasters may amplify price rises for luxury materials. Still, luxury real estate remains a favored investment—cash buyers anchoring stability amid market shifts.
Spotlight on St. Louis: Value and Livability in the Luxury Market
According to the “Luxury Cut: The Summer 2025 Wall Street Journal/Realtor.com Housing Market Ranking,” St. Louis tops this quarter’s luxury housing market—highlighting its unique blend of value, culture, and livability. While the national median listing price for the top 10% of homes is just under $1.3 million, St. Louis’s luxury tier sits at about $697,000—just over half the national average.
This affordability is matched by substance—historic neighborhoods, vibrant communities, manageable commutes, and economic stability. With strong buyer interest and healthy inventory levels, St. Louis proves that today’s luxury buyers prioritize value, balance, and long-term livability over coastal prestige.
Read the full report here—a must for understanding shifting luxury market dynamics.
Explore St. Louis Luxury Living
If you’ve been considering a move, now is the time to explore St. Louis’s thriving luxury market. Whether you’re looking for a historic estate, a modern city condo, or a private suburban retreat, the region offers exceptional value compared to other U.S. luxury markets.
Ready to see what’s possible?
Contact The Wells + Michael Collective today to discover curated listings, market insights, and personalized guidance that can help you secure the perfect property in one of America’s most exciting luxury markets.
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