Luxury home prices are soaring — and this major US city is doing it right

Over the past 10 years, the definition of luxury real estate has shifted dramatically, with the once-lofty $1 million price tag no longer serving as the benchmark of high-end housing.

In 2025, a typical buyer looking for an entry-level luxury property would have to part with a minimum of roughly $1.3 million just to get a foot in the door.

This seven-figure amount marks the lowest threshold of the top 10% of the nation’s most expensive listings, according to a new analysis of the U.S. luxury market from Realtor.com®. For context, that amount is nearly three times the national median list price of approximately $430,000.  

House hunters looking to break into high-end luxury—the top 5% of the market—should be prepared to spend at least $2 million in 2025.

Meanwhile, entry into the ultraluxury segment—the top 1% of the market—now requires a minimum investment of just under $5.5 million, representing an astonishing 12.6 times the median list price.

“With the rapid appreciation of houses due to both supply and demand and general inflation, many buyers are shocked at how little $1 million or $2 million will get them,” Mark Pruner, sales executive with the Greenwich Streets Team at Compass, tells Realtor.com. “Of these ‘shocked’ buyers, some raise their search price point and some look in other towns and areas where prices are lower.”

What’s driving the luxury price surge?

So what factors have sent luxury home prices into overdrive during the past decade?

Realtor.com senior economist Anthony Smith explains that the COVID-19 pandemic was a watershed moment that turbocharged and fundamentally altered the housing market.  

“Before the pandemic-era demand surge and low mortgage rates put home prices on steroids, a million-dollar home was in the nationwide top 10% of homes; and back in 2016, a million-dollar price tag would have landed a home among the top just outside of the top 5%,” says Smith.

But as mortgage interest rates plummeted at the height of the global health crisis, the starting price of a luxury home soared from $796,922 in July 2016 to $1.3 million in July 2025—a 63% leap.

“Put simply, a million-dollar listing still means a seven-figure price tag, but today it takes closer to $1.6 million to snag a home with the same luxury status that a $1 million listing carried in 2016,” adds Smith.

It’s important to keep in mind that “luxury” is not an absolute term and could mean very different things in different markets. 

For example, in Detroit, $1 million could buy you the iconic Tudor Revival-style 32,529-square-foot Bishop Mansion featuring 12 bedrooms, 8.5 bathrooms, and a four-car garage.  

Meanwhile, in San Jose, CA — the nation’s most expensive housing market as of August — roughly $1 million would just be enough to purchase a three-bedroom, 1,200-square-foot bungalow.     

Nationally, million-dollar-plus listings account for just over 13% of all for-sale homes, but they are most prevalent in metros known for high-end living.

“Luxury has decoupled from the broader housing market because the very wealthy are multiplying their capital while the middle class struggles with affordability,” Ana Bozovic, a Miami-based real estate agent and founder of Analytics Miami, tells Realtor.com.

As a result of the widening wealth gap, the upper tier of buyers now commands extraordinary purchasing power.

“Even as borrowing costs have risen, this cohort remains largely insulated, transacting in cash and allocating capital into real assets as a store of value,” she adds.

Old-money wealth hub

Perhaps unsurprisingly, New York City and its surrounding area boast the most million-dollar listings among the top 10 metros, at roughly 12,000, making up a third of the Big Apple’s active inventory—with the most expensive 10% of homes starting at $2.88 million. 

Located an hour’s drive from midtown Manhattan, the well-heeled suburb of Greenwich, CT, has long been synonymous with East Coast luxury. Pruner, with Compass, says that since 2019, the median sales price in Greenwich has climbed 74% to $3.25 million.

Notably, only 10 homes out of 362 sales have sold for under $1 million so far this year. 

“The record stock market run-ups have led to luxury buyers with a lot of paper wealth,” explains Pruner. “Many of these buyers are looking to reallocate funds from the stock market to the housing market, since they have more confidence in the housing market due to our very low inventory.”

Looking at Greenwich’s luxury real estate segment, Pruner identifies three key factors driving prices in the top 10%: limited supply, the rich getting richer, and rising inflation.

“Normally, we should have about 550 listings for our fall market, but we only have 124 single-family homes on the market,” notes the agent. “Every week this year has been our lowest inventory ever for that week. Both the stock market run-up and large inheritances mean many people have the money to make large purchases and that demand exceeds our supply.”

Miami’s soaring luxury sector

Another popular coastal hub, Miami ranks third in the number of listed homes priced above $1 million, at 10,074 properties, behind Los Angeles. In Miami, the top 10% of homes on the market begin at just under $2.1 million.

Bozovic says that during the first six months of 2025, the entry price of the top 10% of Miami’s single-family home market was $2 million, up from just $722,000 in 2015—a 177% surge. 

Looking at the sales volume, closings involving highly coveted single-family properties worth $1 million and up made up 24% of all transactions between January and June 2025. During the same period 10 years earlier, sales past the $1 million mark accounted for just 7% of all closings. 

“Ten years ago in Miami, $1 million bought a 2,700-plus-square-foot waterfront home in Miami Shores,” says Bozovic. “Today, that same $1 million buys a 1,400-square-foot dry-lot house [without water access] in North Bay Village. The definition of luxury has completely shifted, especially when it comes to single-family homes: What was prime in 2015 is entry-level in 2025.”

According to Bozovic, Miami’s sharp growth in the top 10% of the single-family home market is closely tied to tight supply.

“Simply put: You cannot add more inventory vertically and you cannot create more land, and especially not more prime waterfront lots,” says the agent. “That inherent scarcity has turbocharged single-family pricing and especially the uber-luxury segment.”

Other factors fueling Miami’s surging luxury values include its tax-friendly environment and its appeal as a destination for wealth migration and global capital inflows.

“Miami has become a path of least resistance for capital, entrepreneurship, and talent,” argues Bozovic. “Miami’s land supply is fixed, waterfront sites are exceptionally scarce, and demand has only accelerated.” 

What are luxury buyers looking for?

Today’s deep-pocketed house hunters have an extensive priorities list that varies based on their chosen markets as well as personal tastes.

For example, Pruner says that luxury buyers in Greenwich in 2025 are looking for well-constructed properties with top-of-the-line finishes that offer “a more homey feel,” rather than the sprawling, sterile, and often shoddily built “McMansions” of the early aughts.

“Family rooms next to large kitchens with islands are popular,” says the agent. “You see these rooms in the modern farmhouse design, which also have sharply pitched metal roofs and gables with white exteriors. This style is very popular with younger buyers, who don’t want to live in their ‘parents’ house.’”

In Miami, Bozovic says “waterfront is still king,” but she adds that buyer demand has expanded to branded residences, wellness-focused design, and seamless indoor-outdoor living.

“Buyers are prioritizing quality of life and personal safety, looking for homes that provide both comfort and security,” she says.