The luxury market is riding high

Some positive news

We know that there has been a lot of tough news in our industry lately. So when some good news comes along, it’s worth highlighting.

And right now, there’s some great news for luxury agents.

While surging mortgage rates are sidelining many buyers, wealthy shoppers paying cash are driving luxury home prices higher. Over the past two years, home prices are up by more than 4% nationally.

We give you all the details of this trend in our first story. 

But what if you don’t work in the luxury sector? How do you find leads and attract clients when high mortgage rates are keeping so many buyers on the sidelines?

Scroll down. That’s exactly what I tackle in today’s Foundation Plans. I give you some practical tips on finding leads using sources many agents overlook. 

Let’s get into it!

- James

America’s new housing market is all about luxury

Mortgage rates above 7% have pushed many buyers to the sidelines, but the luxury market is still going strong. According to the WSJ, the top third of the market is paying with jumbo down payments and all-cash purchases. 

That spending alone has pushed national home prices up more than 4% over the past two years. In 33 of the top 50 metro areas, luxury prices are rising faster or falling slower than starter-home prices.

Here’s what else to know about this trend:

• Cash is powering the luxury market. A quarter of Toll Brothers’ buyers pay cash, and the luxury builder’s average selling price rose to $996,000 from $974,000. Entry-level builder Lennar’s average price fell to $372,000 from $383,000.

• The AI boom has lifted only the top end in San Francisco. Luxury prices in the Bay Area are up 4.6% year over year. Starter homes are down 1.7%, and mid-tier homes are down 0.6%.

• Starter homes are sliding in former hot spots. In Tampa, homes under $305,000 fell 4.1% in August, while luxury homes held at 0.4% growth. In Austin and Dallas, entry-level prices are down at least 5% from a year ago.

• Home equity is giving move-up buyers an edge. One North Carolina owner sold his 2021 purchase for $1.55 million after it nearly doubled in value. He is now paying cash for a roughly $725,000 home in Maine.

My take

With a quarter of Toll Brothers’ buyers paying cash, luxury agents should stop selling around rates and start selling speed and certainty. Skip the first-time buyers who’ve hit pause and go after owners sitting on equity, especially anyone who bought between 2019 and 2021. Show them what they could walk away with. Build ties with financial advisers and CPAs who know which clients just cashed out stock or sold a business. And market listings on cash buyers’ terms: a fast close, a clean contract, and no financing contingency. Right now, the agent who knows where the cash is beats the one waiting for rates to drop.

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Pending home sales fell 7.3% in September

Pending home sales fell 7.3% from August to September and 11.3% from a year earlier, according to NAR’s latest Pending Home Sales report. 

The slowdown reached every region of the country and all 50 of the largest metro areas, as fast-rising mortgage rates pushed monthly payments higher and kept many buyers on the sidelines.

Here are the key takeaways from the report:

• Every region declined. Pending sales fell both month-over-month and year-over-year in the Northeast, Midwest, South, and West.

• The West was hit hardest. The region posted a 9.2% monthly drop and a 15.0% annual drop, followed by the South at 8.2% and 12.0%, respectively.

• The Northeast and Midwest held up best. The Northeast had the smallest monthly decline at 4.2%, while the Midwest had the smallest annual decline at 8.7%.

• No major metro was spared. All 50 of the largest metros saw annual declines, though Nashville (−2.0%), Hartford (−2.1%) and San Francisco (−3.5%) posted the smallest drops.

• Mortgage rates are the main driver. With rates hovering around 7.4%, NAR Chief Economist Lawrence Yun said rates could be topping out, but he cautioned that rising energy prices and inflation make the outlook highly uncertain.

• Downward forecast for 2026: Yun revised his 2026 housing forecast downward, projecting that existing-home sales and prices will grow by just 2% or less for the year, while new-home sales are expected to decrease by 5%

My take

A 7.3% plunge in pending sales sounds alarming, but this looks more like a market in a standoff than one in free fall. Buyers are waiting for lower mortgage rates, while limited distressed inventory is helping support prices. Neither side is eager to blink. But that standoff creates opportunities for buyers willing to act. With fewer competing offers and more room to negotiate, this fall’s market may offer advantages that disappear if rates fall and buyers rush back in. Of course, there’s no guarantee rates will decline anytime soon, especially with rising energy prices adding to inflation uncertainty. So the question for buyers isn’t simply whether they can get a better mortgage rate by waiting. It’s whether the potential savings from waiting outweigh the bargaining power they have today.

The most (and least) affordable counties in the country

Homes were less affordable than their historical averages in 98% of counties in the third quarter of 2026, according to ATTOM’s latest housing affordability report. 

Nationwide, monthly homeownership expenses on a median-priced home would consume 31.8% of the typical worker’s wages. In 180 of the 583 counties analyzed (30.9%), those expenses would take more than 43% of typical wages, the threshold considered seriously unaffordable.

Here are the most and least affordable counties in the U.S., ranked by the share of a typical resident’s wages needed to cover the costs of owning a median-priced home.

My take

If you want an affordable house, the map points one direction: away from the coasts. California alone accounts for 12 of the 25 least affordable counties, with New York, New Jersey, and Hawaii filling out much of the rest. The bargains, meanwhile, cluster in the South and the industrial Midwest, and Alabama claims three of the 10 most affordable spots. In places like Montgomery, Birmingham, and St. Louis, homeownership expenses consume just 15% to 17% of typical wages; in some coastal counties, they exceed 100%. With owning a typical home now eating more than 43% of wages in nearly a third of counties, the real housing decision for a lot of buyers isn’t which house — it’s which state.

Schematics

The news that just missed the cut

• The 10 safest cities in the U.S. — and the 10 least safe

• Scripts for any lead, any time

• Agents: don’t do these things – you’ll lose clients otherwise

• 5 ChatGPT prompts to get more real estate leads and listings

• 9 MLSs are now pushing back against Compass

Foundation Plans

Advice from James to win the day

Real estate can be extremely lucrative, but it doesn’t come easy. There is a reason why David and I prospect every day. Generating leads and securing listings is utterly essential to not only achieving success, but maintaining it. 

That’s especially true right now, where high mortgage rates have sidelined buyers and made life particularly challenging for agents working outside the luxury sector. 

So, today, I’d like to highlight some sources for leads and listings that agents often overlook.

Probate Court – Mostly because they don’t understand what it is, agents typically don’t use this source to generate leads. But that’s a mistake. Probate is simply the process of selling a home after someone passes away. The court appoints an executor of the estate who can then sell the property. If keeping the home in the family is not an option and the executor wishes to cash it out, that’s a listing. Sometimes, they’ll re-invest the proceeds in real estate; sometimes you’ll just sell that listing. Either way, they need someone to sell the estate. 

Lenders and Stagers – When was the last time your lender sent you leads? When have you asked? Who do they know who is getting prequalified to buy right now and has a home to sell? Stagers are also a great lead source that agents often overlook. Refer business to stagers and ask for leads in exchange.

Property Investors – Join your local investors’ club through meetup.com or private Facebook groups in your town. You’ll know who’s looking for what property and which investors are likely to sell. This also gives you insider information about pocket listings, which can benefit your buyers. 

I’ll say more over the coming weeks, but to discover more traditional and non-traditional lead generation sources, start here.

Breezy

Feature of the Week — Efficiency

Breezy runs alongside real estate agents throughout the day and acts as an AI personal assistant in real time.

At a high level, Breezy does these things:

• Captures and organizes conversations so no follow-up or detail gets lost

• Generates branded comps and reports on the fly, ready for clients

• Keeps your pipeline current automatically, without manual updating

• Reveals how you can reposition and develop your property through proprietary software we call Underbuilt

Instead of agents juggling spreadsheets, notes apps, CRM updates, and presentation tools, Breezy brings those workflows together.

Try Breezy free for 30 days with code BLUEPRINT30.

Just in Case

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

“Your time is limited, so don’t waste it living someone else’s life.” — Steve Jobs

Each day is a gift – a chance to live the life you want. Ruthlessly focus on your goals. Don’t let your past or the fear of being judged distract or paralyze you. Choose to live with an integrity that you can be proud of.

Have a wonderful weekend, and I’ll see you back here next Friday!

- James