Why the luxury sector is outperforming everything else

The growing gap

One of the biggest themes of the 2025 real estate market has been the growing gap between the luxury market and the rest of the housing market.

Today’s report proves that yet again.

As you’ll see in our first story, in August, sales of million-dollar homes jumped significantly year-over-year in comparison with overall home sales. We’ll dig into why this trend is happening, and why it’s unlikely to slow down.

On the subject of slowing down, we know sometimes agents get so focused on our daily work that they don’t take the time to build and manage the systems that could help make that work much simpler. In today’s Foundation Plans, we offer some quick tips on how to build those systems, and we explain why they are so valuable.

With that, let’s dig into today’s Blueprint!

- James and David

Million-dollar listings are the hottest sector in the housing market

In August, sales of homes priced at $1 million or more jumped 8.4% year-over-year, while overall home sales were only up 1.8% YoY, according to the latest update from NAR via Yahoo News. Here are other key takeaways from August:

• Market pace: The median $1 million–plus home spent 27 days on the market, only three days longer than homes in the $250,000–$500,000 range, which remains the most active segment nationwide.

• Overall median price: The median U.S. home sold for $422,600

• Luxury definition: Realtor.com defines “entry-level luxury” in 2025 as homes selling for at least $1.3 million—the top 10% of the market nationwide.

• Regional contrast: Outside of high-cost metros like Los Angeles, San Diego, San Francisco, New York, and Boston, $1 million listings remain relatively rare.

• Vegas spotlight: Las Vegas continues to shine in the luxury space, with nearly 1,300 homes above $1 million sold this year so far, on pace to surpass the 2024 record of 1,776.

• No signs of luxury slowdown: For the luxury sector, there are no signs of a slowdown either in 2025 or into 2026

Our take

We continue to see a growing gap between affluent buyers and everyone else. High mortgage rates and economic uncertainty continue to suppress sales in the middle of the market, but well-capitalized buyers remain largely untouched. Many are flush with equity from previous homes or stock market gains, allowing them to buy with cash or significant down payments. This dynamic shows how uneven the housing recovery has become, and why the luxury sector isn’t about to slow down.

Markets where homeownership takes the smallest bite out of income

According to ATTOM’s Q3 2025 U.S. Home Affordability Report, the typical monthly cost of owning a home—including mortgage payments, property taxes, and insurance—stood at $2,123 nationwide. That figure was unchanged from the prior quarter, but up 6% from a year earlier. Owning a median-priced single-family home or condo required 33.3% of the average American’s wages, a 1.1% increase from last year. 

Among the 25 least-affordable counties, 12 were in California and five were in New York, underscoring how housing costs remain heavily concentrated in coastal markets.

Below are the 10 counties where homeownership consumed the smallest share of annual wages in Q3 2025:

1. Cambria County, PA – 9.8%

2. Macon County, IL – 14.2%

3. Jefferson County, AL – 16%

4. Peoria County, IL – 16.1%

5. Mobile County, AL – 16.5%

6. Rock Island County, IL – 16.8%

7. Wayne County, MI – 17.1%

8. Saint Lawrence County, NY – 17.2%

9. Calcasieu Parish, LA – 17.6%

10. Terrebonne Parish, LA – 17.7%

Our take

Agents should pay close attention to these affordable pockets. Counties where homeownership consumes less than 20% of local wages offer a rare combination of stable prices and untapped demand. Buyers priced out of major metros are increasingly willing to relocate for affordability, especially as remote and hybrid work persists. Agents who position themselves early in these value markets can capture migrating buyers, investors seeking cash flow, and first-time homeowners chasing affordability.

Where large investors own the biggest share of housing inventory

The role of investors—especially institutional buyers—in the housing market is often overstated. Nationally, they own just under 1% of single-family homes, according to Parcl Labs. But in certain regional markets, their presence is far more significant.

For context:

• “Large institutional investors” refers to REITs and private equity firms that own 1,000 or more single-family residences (SFRs).

• “Large investors” refer to any firms, whether institutional or not, that own at least 100 SFRs.

Until now, there hasn’t been clear, county-level data showing where these large investors are most concentrated. That changed with a new ResiClub report, produced in partnership with the AEI Housing Center and Parcl Labs, which maps out investor ownership across more than 2,000 U.S. counties.

According to their analysis, these are the top 10 counties where large investors own the highest share of single-family housing stock:

1. Henry County, GA: 9.1%

2. Paulding County, GA: 8.6%

3. Douglas County, GA: 8.5%

4. Clayton County, GA: 7.4%

5. Newton County, GA: 7.3%

6. Clay County, FL: 6.8%

7. Rockdale County, GA: 6.3%

8. Miami County, IN: 5.9%

9. Desoto County, MS: 5.7%

10. Cabarrus County, NC: 5.7%

Our take

Agents and investors operating in these counties should recognize that competition from large landlords is shaping local inventory and pricing dynamics. In markets like metro Atlanta, institutional ownership has created a mature single-family rental ecosystem, with strong property management networks and steady rental demand. For agents, that means two opportunities: 1) represent investors looking to scale portfolios in proven SFR markets or 2) pivot toward smaller buyers seeking affordable homes outside institutional “buy boxes.” Understanding where Wall Street capital is concentrated helps you position clients strategically, either by leaning into investor demand or steering clear of saturated areas.

When we decided to join Million Dollar Listing, it was all about reach. We knew the kind of clients TV exposure could bring. Today, social media has that same power. That’s why our partners at Estate Media created the Agent Growth Program specifically for agents and brokerages who want to elevate their social presence to the next level. You film in short sessions, and their team handles everything else: scripting, editing, posting, and performance tracking. The Blueprint readers get a free social media audit.

Schematics

The news that just missed the cuts

• You can now use ChatGPT to search for properties on Zillow

• Use this template to create a viral listing video

• AI hacks real estate agents should know

• FICO’s new program gets mixed reviews

• The 100K-acre “Marlboro Man” ranch lists for $52.8M

Foundation Plans

Advice from James and David to win the day

As a rule of thumb, at least 10% of your database should buy or sell with you every year. These kinds of results only happen IF your communication with your clients is regular and systematic. Today, we’d like to offer you some advice on how to set up your database for success:

Put ALL your contacts in your database – Purchase a good CRM, and take the time to gather phone numbers, email addresses, and social media information for each entry. Enter your past clients, people from your sphere of influence, and buyers who bought your listings. Many times, they worked with another agent, but you are adopting them. You may also add your professional sphere of influence, like home inspectors and mortgage lenders. Add details to each person to help you remember them. 

Commit to adding at least five new people per week – Get into the habit of exchanging information on the spot when you make new connections. You don’t need to be pushy or salesy, but don’t be shy to share who you are and what you do. Genuinely believe in what you do because we agents actually add value to people’s lives. 

Update your database weekly as part of your daily minimum standards – Commit to never letting it get out of date, become neglected, out of control, or unwieldy. Simply put, if it’s hard to use, you won’t be able to use it!

Change your mindset about your database – Don’t think of updating your database as a chore. When done right, not only will it pay dividends in deals, you’ll actually build an asset you can sell later in your career. A well-kept book of business is a valuable thing. Never forget that.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

"Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution."  – Attributed to Aristotle

Thanks for reading, friends. Be intentional with your time and what you do because excellence doesn’t just happen. It takes focus, practice, and effort.

Have a great week. We’ll see you back here on Friday!

- James and David