The luxury real estate market is experiencing notable changes in inventory, sales, and pricing trends. Both month-over-month and year-over-year data show increasing opportunities for buyers due to interest rate cuts, mortgage adjustments, and rising buyer activity. Shifts in consumer confidence, influenced by economic and political factors, have created a dynamic environment for high-end real estate.
The Institute’s Luxury Market Report is your guide to an analysis on the trends and comparative data on the top-residential markets throughout Canada and the United States.
Key Trends in the Single-Family and Attached Real Estate Markets
- Single-Family Homes: October 2024 marked a significant shift, with a 19.7% increase in inventory and a 21% surge in sales compared to last year. However, month-over-month data reveals a slight inventory decline (down 3.5%) and a drop in new listings (10.6%), while sales rose by 10.4%. This suggests an adjustment phase where inventory enters steadily, and demand holds strong.
- Attached Homes: Condos and townhomes saw substantial growth, with inventory rising 27.7% and sales climbing by 12.2% year-over-year. Although month-over-month listings declined slightly, demand remains robust, indicating that luxury buyers are increasingly interested in high-end attached homes.
Market Stability and Buyer Favorability
Median sale prices in both markets remain steady, suggesting a balanced landscape. With more inventory and strong sales, conditions are increasingly favorable for buyers targeting luxury properties in competitive areas. Interest rates, inventory and consumer confidence are key factors to watch, as they will likely continue shaping demand in the months ahead.
Emerging Conflicts and Influences
Despite rate cuts, some buyers are cautious, awaiting further reductions. Elevated home prices keep demand muted, especially among aspirational buyers. Additionally, factors like job growth and regional housing demand create resilience in certain markets, even amid broader economic shifts.
However, the market shows signs of increased activity, as high-end buyers take advantage of growing inventory and improved rates. If additional rate cuts occur, we may see continued sales growth as more buyers re-enter with optimism.
Future Opportunities and External Influences
As pandemic disruptions fade, investors are poised to see an upturn, fueled by rate cuts and evolving real estate market dynamics. In particular, the Federal Reserve and Bank of Canada signal lower inflation and construction costs through rate cuts, which could boost transactions.
Today’s real estate market drivers are different from the past, focusing on supply dynamics and the quality of building stock. High-demand property types include historic homes, fully furnished apartments, eco-friendly homes, and those with accessory dwelling units (ADUs). In 2025, these trends could lead to substantial value increases, presenting diverse opportunities for luxury homebuyers and investors.
In this evolving landscape, understanding market realities and working with an informed real estate agent can be essential. By staying informed on shifts in demand and buyer preferences, buyers and sellers can make strategic decisions to meet their real estate goals in today’s luxury market.
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