Luxury Home Prices Are Falling, but These Pockets of Growth Are Defying the Slump

Luxury home prices are sinking in much of the country, but there are significant exceptions, where high-end home prices just keep rising.

The national threshold for luxury homes—defined as the top 10% of listings—in October came in at $1,197,014, down 2.3% from one year ago, according to the latest Realtor.com® monthly luxury report.

The downward trend held in the upper tiers of the luxury market, with the 95th percentile down 4.1% to a threshold of $1,873,040 and the 99th percentile down 6.2% to $5,125,874.

However, in certain golden pockets, the luxury market is thriving. Of the 43 metros in the report's dataset, 12 posted a year-over-year increase of 1% or higher.

"Although the price point for entry luxury has had 31 consecutive months of annual decline at the national level, there are markets where prices are climbing and, in some cases, well above the year-ago levels," says the report's author, Realtor.com senior economist Anthony Smith.

Of those 12 robust luxury markets, the South massively dominates, with five markets in Florida alone. Only two Northern metros—Atlantic City and Detroit—made the cut.

Nor are these necessarily the most expensive markets in the U.S. While those pricey markets—with familiar names like Bridgeport-Stamford-Danbury, CT, and Los Angeles-Long Beach-Anaheim, CA—have the highest entry thresholds to luxury, their prices are slipping.

Of the 12 most expensive markets, only Naples-Marco Island, FL, with an entry threshold of $3,753,333, continues to show price gains. Nor are these gains negligible—the metro's luxury threshold is up a very healthy 9.0% year over year.

While this is only 1.3 percentage points over second-place finisher North Port-Bradenton-Sarasota, FL, with a much lower entry to luxury at $1,796,850, it is a full 4.3 percentage points over third-place finisher Charleston-North Charleston, SC.

Naples comes ahead in another key way, too. Luxury properties are moving a median 27 days faster than last year, or 21.1% quicker, by far the fastest pace increase of all the growth metros. The second-place finisher, Cape Coral-Fort Myers, FL, is moving 18 days faster than last year, or 16.1%.

The price gains aren't limited to entry-level luxury, or the top 10%. Eight of the 12 metros saw all three luxury tiers rise from a year ago, a sharp contrast with the national picture, where all those thresholds fell.

The largest gain for the top 1% of listings (ultraluxury) came from Charleston-North Charleston, SC. Here, the entry-level luxe threshold rose 4.7% (the third-highest in the nation), but its top 1% of properties blasted past that with a median price increase of 18.7%, for a threshold of $8,044,460.

These are the top 12 growth markets for entry-level luxury:

• Naples-Marco Island, FL (up 9%)
• North Port-Bradenton-Sarasota, FL (up 7.7%)
• Charleston, SC (up 4.7%)
• Raleigh-Cary, NC (up 4.3%)
• Boise City, ID (up 4.2%)
• Cape Coral-Fort Myers, FL (up 4.1%)
• Miami-Fort Lauderdale-West Palm Beach, FL (up 4.1%)
• Nashville-Davidson-Murfreesboro-Franklin, TN (up 3.6%)
• Atlantic City-Hammonton, NJ (up 3.0%)
• Las Vegas-Henderson-North Las Vegas, NV (up 2.2%)
• Tampa-St. Petersburg-Clearwater, FL (up 2.1%)
• Detroit-Warren-Dearborn, MI (up 1%)

The No. 1 luxury growth market: Naples-Marco Island, FL

On the southwestern edge of the Sunshine State, dubbed the Paradise Coast, Naples has long lured snowbirds eager to escape Northern winters and embrace the blue-green waters and white sandy shores of the Gulf.

But it hasn't always been a top luxury haven; in fact, that aspect of the area is rather new.

Luxury broker Taylor Canada of Gulf Coast International Properties, who was born and raised in Naples, says that in the 1980s, the town was "nothing."

"On the beach, there were like four buildings," he tells Realtor.com.

But over the decades, the agent has seen the metro change dramatically, with booming development and sprawling Tuscan-style mansions and high-end retail. Still, the town has managed to retain much of its "small town" charm, thanks to tight building regulations.

"They are really trying to make it not Miami," he says of the city. "That attracts a lot of affluent buyers to the lifestyle and the quietness."

The wealthy in Palm Beach County are "more showy," he says. "Here, you could be behind a billionaire in the grocery store and never know."

The broker, who currently represents a $9 million, four-bedroom, 4.5-bath 5,000-plus-square-foot estate in Old Naples, isn't surprised that his hometown is bucking the national trend, with luxury prices on the rise.

"We're seeing records broken monthly," he says of certain exclusive and waterfront neighborhoods. Even the luxury condo market, which he says "struggled for a few years," is showing signs of a recovery, with the occasional bidding war.

Buyers at this level are the usual suspects, hailing from more expensive states such as New York, Washington, and California. But, uniquely, the area also sees a lot of local buyers who "shuffle around" from one luxury property to another.

"Every three to five years, they figure out where they want to go next," Canada says of mobile Naples lovers. "They go, 'Oh, maybe I want to be on the water, or maybe I want to get closer to the beach, or maybe I want to be in a golf community.'"

And while Naples still draws an older crowd, the agent says it is more common now to see buyers "in their 40s and their families." While the techies tend to head to Miami and the West Coast, the CEOs and business leaders prefer the East Coast, he says.

And what they want are properties that are brand-new, turnkey, and furnished.

"They're willing to pay a premium for that," he adds.

Florida's plethora of tax breaks—including the newly approved measure that would reform the state's property tax system—is luring high net worth individuals more than ever before.

"The tax break is paying for their property, almost," he says.

No. 2: North Port-Bradenton-Sarasota, FL

The metro with the second-highest annual growth in the nation, with a 7.7% increase, is 120 miles north of Naples, nestled along Sarasota Bay. Luxe homes, with an entry threshold of $1,796,850, are moving nine days faster than they did last year.

The North Port-Bradenton-Sarasota metro encompasses multiple barrier islands, including Longboat Key and Siesta Key, with famous Siesta Beach, which often tops "beat beaches" polls due to its nearly 100% quartz-crystal sand.

Like Naples, Sarasota wasn't always a luxury haven.

Local broker Joel Schemmel of Douglas Elliman has been representing the area for 25 years and concentrates on the top 1% of properties, or those over $4 million.

Those with fat pocketbooks began pouring into Sarasota during the COVID-19 pandemic, he says. Now, buyers continue to be lured by the pristine white beaches, cultural attractions (Sarasota has a vibrant arts community), and top-notch schools, including the renowned IMG Academy sports prep school in Bradenton.

"We've really seen movement in the ultraluxury market," he tells Realtor.com, noting that sales priced at $4 million and over are up about 80% since last year.

The broker attributes the soaring luxury market to the end of a buying funk, when people were "thinking a bit more" about investing in waterfront properties due to storms. In fall 2024, Sarasota County had just caught its breath from Hurricane Helene when it was slammed by Hurricane Milton.

But apparently those hurricane hesitations have been swept away.

"Newer construction went through the storms unscathed," says Schemmel. "All of those people who were on the fence are like, 'If I want a house in Florida, why not buy now?'"

The typical multimillion-dollar estate buyer is already familiar with the area and upgrading, says the broker. Then there are the out-of-towners—mostly from the New York-New Jersey-CT tristate area—who are discovering Sarasota for its comparable affordability.

"We have a lot more waterfront options, and our price point is in a different zone from the East Coast and Naples," he says. "The value is here."

Not every property seems like a value play—Schemmel currently represents a $38.45 million 11-bedroom, 17,200-square-foot estate on Longboat Key—but that price tag would double or triple in Naples or Palm Beach.

The threat of erosion, storms, and climate change isn't stopping the wealthy from plunking down millions on properties mere feet from the water.

"Any time I'd think there would be an exodus from those barrier islands," he says. "I'd be proven wrong."