Here’s a look at the divisions within the luxury real estate market.

June 27, 2025 Luna Ray 195 Views

View of luxury waterfront homes and boats along the intracoastal waterway near Jupiter Inlet in Jupiter, Florida in Palm Beach County

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A version of this article first appeared in Hotnchill’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Subscribe to receive future editions straight to your inbox.

Economic uncertainty is creating a divide in the luxury real estate market between ultra-rich buyers and those with considerable wealth, according to a new report from brokerage Coldwell Banker. A survey of about 200 agents specializing in luxury property found that ultra-wealthy buyers, defined as individuals worth at least $30 million, continue to make significant purchases despite trade war and recession concerns. They are also driving a notable increase in all-cash offers. Conversely, affluent but less wealthy buyers are more sensitive to interest rates and are acting more cautiously, as outlined in the report.

Just over half of the surveyed agents indicated a slight or substantial increase in cash purchases by clients in 2025. Only 3.9% reported a decline in those buyers during the first five months of 2025, while 45.4% stated that cash purchases had remained steady, according to the report.

Jason Waugh, president of Coldwell Banker Affiliates, told Inside Wealth that high interest rates are a major factor behind this trend.

“Cash provides a buyer with control. It provides leverage, speed, and security,”

he explained.

“But it’s really the elevated borrowing costs that continue to remain so high. Why absorb those costs if you have the cash to close on a real estate purchase, right?”

Waugh, who obtained his broker license nearly 32 years ago, stated that real estate can be more appealing during times of economic uncertainty. Just over two-thirds of surveyed agents reported that affluent clients were maintaining or increasing their exposure to real estate, while only 11.3% indicated a decrease in favor of equities and other financial assets. The remaining 20.6% of agents noted that clients had put their plans on hold due to economic or stock market uncertainty.

“It’s been a roller coaster, and the business is cyclical. I think at the end of the day, real estate is a hard asset that can preserve wealth and is a hedge against inflation,”

he remarked.

“I think that data really confirms that narrative that folks see real estate as a great way to accumulate wealth even in the most uncertain and volatile economic environment we’ve navigated in well over a decade.”

While luxury home sales overall rose in the first five months of 2025, they experienced a decline in May, the first full month following April’s stock market dip. The report, citing data from the Institute for Luxury Home Marketing, noted that luxury single-family home sales dipped 4.7% year over year, while sales of attached properties fell by 21.1%.

Agents are also observing more clients reducing list prices in 2025 compared to recent years, according to Waugh. The median sold prices for luxury single-family and luxury-attached properties currently stand at $1.7 million and $1.25 million, respectively, according to the Institute for Luxury Home Marketing.

Waugh emphasized that buyers across all price points are more discerning than they were a few years ago. They are increasingly requesting top-end appliances, including smart fridges, spa-level amenities, and indoor-outdoor living features ranging from fireplaces to full kitchens.

First-time luxury buyers are particularly selective, he noted.

“They may be stretching themselves, given the current rate environment, so they’re going to be a lot more discerning in terms of evaluating where they live, the amenities, and the condition of the property at move-in,”

he said.