Luxury housing market loses spring momentum

Rhea-AI Summary

The luxury housing market showed signs of slowing in April 2025, with the typical luxury home (top 5% most valuable) valued at $1.8 million nationwide. Despite the slowdown, luxury home values increased 2.7% year-over-year, outpacing the broader market's 1.4% growth. New listings fell 5% from March and 3.4% year-over-year, while pending sales dropped 12% month-over-month. California dominates the luxury market, with San Jose ($5.9M), Los Angeles ($5.1M), and San Francisco ($4.8M) leading. The hottest luxury markets include Cincinnati (7.3% growth) and Columbus (6.8%), while Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%) saw declines. Financial volatility and economic uncertainty have caused both buyers and sellers to proceed cautiously, though limited supply continues to support prices.

Positive

• Luxury home values increased 2.7% YoY, outperforming the broader market's 1.4% growth
• Most major metros (47 out of 50) showed positive luxury home value growth
• Strong growth in midwest markets with Cincinnati (7.3%), Columbus (6.8%), and Chicago (6.3%) leading
• Quick sales in Ohio markets with luxury homes going under contract in just 5 days

Negative

• Luxury pending sales dropped 12% in April compared to March
• New luxury listings declined 5% month-over-month and 3.4% year-over-year
• Three major markets saw value declines: Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%)
• 19.9% of luxury listings nationwide required price cuts

Insights

Real Estate Market Analyst

Zillow reports luxury housing slowdown with declining sales despite value growth, suggesting market resilience amid economic uncertainty.

The latest Zillow data reveals a significant deceleration in the luxury housing market during April, with both buyers and sellers retreating amid financial volatility. Despite this activity slowdown, luxury home values have shown remarkable resilience, increasing 2.7% year-over-year—outpacing the broader market's 1.4% growth.

The monthly decline of 12% in pending luxury sales represents a dramatic reversal from the typical spring selling pattern and last year's 10% month-over-month increase. This pronounced shift signals heightened caution among affluent buyers, who despite having substantial resources are clearly responding to broader economic uncertainties.

Regional performance shows striking divergence. While Cincinnati (7.3%), Columbus (6.8%), and Chicago (6.3%) lead in luxury value appreciation, only three major markets—Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%)—experienced value declines. The geographical pattern suggests a potential shift away from pandemic-era boom markets toward more traditionally stable Midwestern metros.

Particularly noteworthy is the high proportion of luxury listings with price cuts, reaching 33.6% in Phoenix and exceeding 20% in many major markets. This indicates sellers are adjusting expectations downward to meet current market conditions. Meanwhile, the narrowing price gap between luxury and typical homes—from 5.5x in 2020 to 5x currently—suggests the ultra-premium segment is facing relatively greater pressure than the broader market.

For Zillow specifically, this data demonstrates their comprehensive market intelligence capabilities while highlighting potential challenges in premium-tier transaction volume that could affect their high-margin services targeting this segment.

Financial Economist

Zillow reports mixed signals in luxury real estate: values up 2.7% yearly but significant activity decline signals economic caution.

The April slowdown in luxury housing activity reflects broader macroeconomic concerns rather than fundamental market weakness. The dramatic 12% month-over-month decline in pending luxury sales coincided with April's stock market volatility, demonstrating the direct relationship between capital markets and high-end real estate demand. This sensitivity is particularly relevant as luxury buyers often fund purchases through investment portfolio liquidations or leverage against securities.

The data reveals a noteworthy divergence between transaction activity and asset values. Despite the activity pullback, luxury home values have maintained 2.7% annual appreciation—double the rate of the broader market. This persistent price strength amid weakening demand suggests structural supply constraints are providing a floor for valuations even as transaction volumes decline.

Inventory dynamics support this analysis, with luxury listings up just 0.9% year-over-year nationally. Supply remains especially constrained in northeastern markets, with New York's luxury inventory down 14.3%. Conversely, western markets show inventory expansion, with Los Angeles up 30.8% and San Jose up 23.8%.

Particularly telling is the geographic performance disparity. Luxury values in Midwestern cities like Cincinnati and Columbus are appreciating at over 6% annually, while formerly hot pandemic markets (Austin, Tampa, Miami) are experiencing actual value declines. This rotation suggests a potential normalization toward pre-pandemic geographic preferences.

The compression of the luxury premium ratio from 5.5x in 2020 to 5x currently indicates the relative outperformance of mid-market homes during this cycle—a phenomenon consistent with broader affordability constraints pushing demand toward lower price tiers. This convergence pattern typically precedes periods of stabilization in the luxury segment rather than signaling further deterioration.

While activity is slowing, luxury home values are higher than last year in all major metros except Austin, Tampa and Miami

• New listings and pending sales are both down, as luxury buyers and sellers cope with economic uncertainty.
• The typical luxury home is worth about $1.8 million nationwide, ranging from just over $835,000 in Buffalo to nearly $6 million in San Jose.
• Despite the slowdown, luxury home values are up 2.7% from a year ago — double that of the larger housing market.

SEATTLE, June 5, 2025 /PRNewswire/ -- The luxury housing market tapped the brakes in April. Financial volatility led both buyers and sellers at the high end to hit pause, according to Zillow's latest look at the luxury housing market.¹

The typical luxury home — defined as the top 5% most valuable homes in each region — is now worth about $1.8 million nationwide, and more than double that in six major metros: San Jose, Los Angeles, San Francisco, Miami, San Diego and New York. These homes typically encompass nearly 3,500 square feet of living space and are often situated on more than two-thirds of an acre. Despite the recent slowdown in total market activity, luxury home values have increased 2.7% over the past year, outpacing the 1.4% growth seen in the broader market.

"Despite a slower market, home prices have continued to climb — a promising sign for sellers considering listing their properties. Luxury home values, in particular, have remained resilient, even as both buyers and sellers took a more cautious approach after the April stock market volatility," said Zillow Senior Economist Orphe Divounguy. "The luxury market is often international, so global economic conditions and stability also play a significant role. As economic conditions begin to stabilize, the luxury housing market could regain some momentum."

Affordability challenges — including high mortgage rates, elevated home prices and ongoing macroeconomic uncertainty — have made many people hesitant to enter the market. While luxury buyers often have substantial equity and cash reserves, they still are proceeding with caution. However, the limited supply of high-end homes and their desirable features continue to keep home values ticking higher, even in a more subdued market.

Early spring brought a burst of activity: From February to March, the number of luxury homes that went under contract went up by more than 30%. But in April, that momentum faded as consumer confidence and investment portfolios dipped. In April, 12% fewer luxury homes went under contract compared to March — a dramatic drop since sales usually pick up in the spring. By comparison, last April, 10% more luxury homes went under contract from the previous month. Sellers also pulled back, with new luxury listings down 5% from March and down 3.4% year over year.

Among the 50 largest U.S. metro areas, typical luxury home values range from just over $835,000 in Buffalo to nearly $6 million in San Jose. California dominates the top of the luxury market, with San Jose ($5.9 million), Los Angeles ($5.1 million) and San Francisco ($4.8 million) ranking as the three most expensive metros for luxury homes.

The hottest luxury markets, where home value growth has surged the most annually, include Cincinnati (7.3%), Columbus (6.8%), Chicago (6.3%), Cleveland (6.1%) and Las Vegas (6.1%). Conversely, Austin (-2.1%), Tampa (-1.7%) and Miami (-0.5%) are the only major markets where luxury home values have declined over the past year. As for where homes are flying off the market, Ohio is front and center. In Cincinnati and Columbus, luxury homes are typically going under contract after just five days.

Nationwide, the typical luxury home is valued at about five times the price of a mid-market home. In 2020, luxury homes were worth nearly 5.5 times as much. This indicates that the price gap between luxury and typical homes has narrowed over time.

Metro Area*	Typical Luxury Home Value	Luxury Home Value Change (YoY)	Share of Luxury Listings with a Price Cut	Luxury Homes, Median Days to Pending	Luxury Homes, Inventory Change (YoY)	Luxury Homes, New Listings Change (YoY)	Luxury Homes, Newly Pending Listings Change (YoY)
United States	$1,816,357	2.7 %	19.9 %	20	0.9 %	-3.4 %	-17.2 %
New York, NY	$3,976,247	4.7 %	11.7 %	37	-14.3 %	-15.2 %	-18.3 %
Los Angeles, CA	$5,127,335	1.3 %	18.4 %	29	30.8 %	14.2 %	-13.8 %
Chicago, IL	$1,484,177	6.3 %	18.4 %	9	-25.6 %	-22.6 %	-18.0 %
Dallas, TX	$1,848,826	2.8 %	24.5 %	18	15.2 %	6.8 %	-9.1 %
Houston, TX	$1,601,027	4.6 %	23.0 %	16	4.3 %	6.2 %	-19.4 %
Washington, DC	$2,271,449	3.8 %	24.2 %	9	9.8 %	3.7 %	-21.4 %
Philadelphia, PA	$1,415,836	3.5 %	15.4 %	7	-10.6 %	-11.2 %	-15.7 %
Miami, FL	$4,552,407	-0.5 %	17.5 %	82	-0.6 %	-11.9 %	-29.0 %
Atlanta, GA	$1,574,667	2.8 %	19.9 %	19	11.2 %	11.8 %	-8.5 %
Boston, MA	$3,033,002	5.1 %	17.1 %	12	3.9 %	12.6 %	-9.4 %
Phoenix, AZ	$2,282,646	3.7 %	33.6 %	33	7.7 %	-9.9 %	-20.8 %
San Francisco, CA	$4,833,421	2.0 %	17.4 %	13	5.0 %	0.7 %	-4.4 %
Riverside, CA	$1,856,035	4.4 %	22.3 %	27	25.0 %	-2.0 %	-15.0 %
Detroit, MI	$1,016,345	6.0 %	15.9 %	6	-5.4 %	-3.4 %	-24.2 %
Seattle, WA	$3,249,761	4.3 %	19.6 %	11	16.6 %	5.4 %	-25.2 %
Minneapolis, MN	$1,323,858	3.7 %	19.9 %	24	-11.4 %	-19.0 %	-14.8 %
San Diego, CA	$4,160,165	0.7 %	21.6 %	18	20.0 %	13.0 %	-12.1 %
Tampa, FL	$1,772,389	-1.7 %	29.2 %	39	2.1 %	0.9 %	-26.5 %
Denver, CO	$2,240,439	0.7 %	25.7 %	14	12.2 %	6.9 %	-11.0 %
Baltimore, MD	$1,464,758	3.4 %	16.0 %	6	0.0 %	-3.0 %	-15.8 %
St. Louis, MO	$1,138,663	4.2 %	20.2 %	7	-12.8 %	-18.9 %	-22.5 %
Orlando, FL	$1,579,477	2.1 %	25.7 %	25	13.2 %	4.7 %	-9.2 %
Charlotte, NC	$1,803,805	3.1 %	22.2 %	6	9.9 %	7.5 %	-24.6 %
San Antonio, TX	$1,297,397	1.2 %	23.2 %	32	-0.7 %	2.9 %	-20.2 %
Portland, OR	$1,665,906	2.5 %	18.0 %	14	4.2 %	-1.1 %	-19.7 %
Sacramento, CA	$2,169,309	1.5 %	20.6 %	10	3.1 %	5.8 %	-17.4 %
Pittsburgh, PA	$941,406	4.8 %	18.4 %	7	-17.1 %	-8.7 %	-2.9 %
Cincinnati, OH	$1,057,525	7.3 %	18.7 %	5	-19.2 %	-12.6 %	-8.4 %
Austin, TX	$2,469,719	-2.1 %	22.2 %	43	-7.2 %	-8.5 %	-22.9 %
Las Vegas, NV	$1,879,567	6.1 %	24.2 %	30	21.5 %	8.7 %	-17.8 %
Kansas City, MO	$1,165,452	3.7 %	25.1 %	8	-8.0 %	-18.7 %	-10.8 %
Columbus, OH	$1,152,893	6.8 %	22.2 %	5	-7.2 %	-12.7 %	-15.2 %
Indianapolis, IN	$1,092,050	4.1 %	22.9 %	6	3.6 %	20.5 %	-3.2 %
Cleveland, OH	$902,534	6.1 %	18.3 %	7	-1.7 %	7.7 %	-15.8 %
San Jose, CA	$5,923,483	4.2 %	15.9 %	10	23.8 %	11.1 %	35.5 %
Nashville, TN	$2,397,091	4.9 %	24.9 %	24	-10.9 %	-16.7 %	-36.6 %
Virginia Beach, VA	$1,365,632	3.6 %	18.1 %	21	15.1 %	-1.4 %	-2.6 %
Providence, RI	$2,095,252	4.6 %	11.7 %	13	35.1 %	66.7 %	9.8 %
Jacksonville, FL	$1,821,428	0.1 %	24.3 %	41	-0.1 %	-10.3 %	-6.2 %
Milwaukee, WI	$1,312,594	4.5 %	16.0 %	29	-13.5 %	-24.8 %	null
Oklahoma City, OK	$961,972	3.7 %	22.1 %	22	-11.0 %	-19.7 %	0.7 %
Raleigh, NC	$1,743,767	4.6 %	23.0 %	9	8.0 %	-1.4 %	-14.6 %
Memphis, TN	$956,117	1.9 %	23.5 %	13	-4.2 %	-5.1 %	8.7 %
Richmond, VA	$1,285,624	5.5 %	15.1 %	7	9.3 %	-2.0 %	-4.0 %
Louisville, KY	$915,074	3.9 %	21.3 %	12	-5.2 %	-9.2 %	-29.8 %
New Orleans, LA	$1,230,067	2.1 %	20.4 %	43	-15.2 %	-22.2 %	-2.8 %
Salt Lake City, UT	$1,809,781	4.5 %	19.4 %	12	-1.9 %	7.5 %	3.7 %
Hartford, CT	$1,103,839	5.5 %	10.5 %	5	5.0 %	3.1 %	3.0 %
Buffalo, NY	$835,064	5.7 %	13.6 %	15	-19.2 %	-4.2 %	9.3 %
Birmingham, AL	$1,310,696	5.0 %	20.2 %	7	-11.7 %	-18.9 %	-26.7 %

*Table ordered by market size 

About Zillow Group

Zillow Group, Inc. (Nasdaq: Z and ZG) is reimagining real estate to make home a reality for more and more people. As the most visited real estate website in the United States, Zillow and its affiliates help people find and get the home they want by connecting them with digital solutions, dedicated real estate professionals, and easier buying, selling, financing, and renting experiences.

Zillow Group's affiliates, subsidiaries and brands include Zillow®, Zillow Premier Agent®, Zillow Home Loans℠, Zillow Rentals®, Trulia®, Out East®, StreetEasy®, HotPads®, ShowingTime+℠, Spruce®, and Follow Up Boss®.

All marks herein are owned by MFTB Holdco, Inc., a Zillow affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org). © 2025 MFTB Holdco, Inc., a Zillow affiliate.

(ZFIN)

¹ The Zillow luxury market report is an overview of the top 5% of the national and local real estate markets. The report is compiled by Zillow Research. For more information, visit zillow.com/research.

 

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SOURCE Zillow, Inc.

FAQ

What is the average value of a luxury home in the US as of April 2025?

The typical luxury home in the US is valued at approximately $1.8 million nationwide

Which US cities have the most expensive luxury homes in 2025?

San Jose leads at $5.9M, followed by Los Angeles at $5.1M and San Francisco at $4.8M

How much did luxury home values increase year-over-year in 2025?

Luxury home values increased 2.7% year-over-year, outpacing the broader market's 1.4% growth

Which cities saw the biggest decline in luxury home values?

Austin (-2.1%), Tampa (-1.7%), and Miami (-0.5%) were the only major markets showing declines

How has the luxury housing market performed in spring 2025?

The market showed signs of slowing with pending sales dropping 12% in April and new listings declining 5% from March