The meaning of “luxury real estate” is changing

What does “luxury” mean?

If you’re like us, you grew up at a time when a “million-dollar home” instantly meant “luxury.”

But that’s not the case anymore.

Between a host of factors – inflation, shifts in wealth, you name it – the “million-dollar home” doesn’t mean the same thing today.

In our second story, we look at why price no longer matters as much as percentile.

These kinds of shifts in perspective can not only help agents better understand their markets, but they can also help clients get a stronger grasp on the current state of the market, instead of relying on concepts that just don’t apply anymore.

We dig into that, and much more, in today’s Blueprint!

- James and David

Pending sales rise as mortgage rates fall

In August, pending home sales ticked up by 4%, marking a modest rebound in buyer activity as mortgage rates eased. Contract signings also rose 3.8% year-over-year, signaling tentative signs of recovery. Here are other key takeaways from realtor.com’s report: 

• Regional differences – The Midwest led with an 8.7% jump, while the South (+3.1%) and West (+5%) also saw gains. The Northeast fell 1.1% on tight supply.

• New vs. existing homes – Builders saw strong sales thanks to incentives, but existing-home sales remain limited by owners locked into low rates. More than 80% of outstanding mortgages have a rate below 6%.

• Fall outlook – More inventory, seasonal trends, and lower rates could boost fall activity, though affordability challenges persist.

Our take

This rebound is a reminder that buyers are rate-sensitive and quick to re-engage when financing conditions improve. With builders using incentives to get interest on their properties, agents in the resale market will need to double down on pricing strategy and creative deal-making. The months ahead may not deliver a full recovery, but they do offer a window for proactive agents to help buyers get going.

Redefining luxury real estate

The meaning of luxury real estate has changed over the past decade, as the million-dollar home no longer carries the same weight it once did. The entry price point has steadily climbed due to migration trends, pandemic-era price surges, and shifting regional dynamics. For example, a $1M home once ranked near the top 10%; now it only places in the top 13%, with $1.6M needed for the same 2016 status.

According to the latest update from realtor.com, “luxury” is better understood through where homes rank in terms of percentiles both nationally and in their market. Here’s a breakdown of what this means:

• The new thresholds

  • The 90th percentile: Entry-level luxury starts at just under $1.3M 

  • The 95th percentile: High-end luxury starts at $2M

  • The 99th percentile: Ultra-luxury starts around $5.5M.

• Luxury is relative to market – A million-dollar listing obviously means different things in different places. The market in Santa Clara, CA, is much pricier than in Toledo, OH. That’s why it helps to use percentiles (i.e. this home price in the 90th percentile for this market) to provide a consistent way to define luxury across markets

• Comparing price points - It helps to measure price points against the median or typical home listing price. For example, the luxury price tier nationwide starts at a price that is 2.9 times more expensive than the median for-sale home, while high-end luxury begins at 4.6 times the median, and ultra-luxury at 12.6 times the median.

Our take

This is a great way to reframe what luxury means. It’s not all about price, but rather where a home ranks within its market. As demand keeps shifting, this definition is going to keep changing. For agents and investors, the takeaway is clear: luxury is fluid, and success depends on knowing how it varies across markets.

The biggest sales in the country so far this year

Luxury real estate in 2025 has already seen some staggering deals, with trophy properties trading hands at eye-popping prices across the country. From a $133 million Gulf Coast estate in Naples to a pair of $110 million sales in Los Angeles, the year’s top transactions highlight the strength of ultra-luxury demand in select markets. 

Miami Beach, Malibu, New York, Beverly Hills, and even Honolulu also make the list, underscoring just how widespread the appetite for record-setting homes has become. 

Here’s a look at the most expensive sales so far this year:

1. 2200 Gordon Dr., Naples, FL 34102: Sold for $133 million in April

2. 594 S. Mapleton Dr., Los Angeles, CA 90024: Sold for $110 million in July

3. 630 Nimes Rd., Los Angeles, CA 90077: Sold for $110 million in May

4. 28719 Grayfox St., Malibu, CA 90265: Sold for $80 million in July 

5. 88 La Gorce Cir., Miami Beach, FL 33141: Sold for $74.3 million in April

6. 4823 Kahala Ave., Honolulu, HI 96816: Sold for $65.8 million in March

7. 71 Beverly Park, Beverly Hills, CA 90210: Sold for $63.1 million in June

8. 66 La Gorce Cir., Miami Beach, FL 33141: Sold for $60 million in March

9. 150 Charles St., Unit 9A, New York, NY 10014: Sold for $60 million in March

10. 1028 Ridgedale Dr., Beverly Hills, CA 90210: Sold for $60 million in April

Our take

For agents, these record deals are a reminder that ultra-luxury buyers play by a different set of rules. At this level, financing costs and market headwinds are secondary. What matters most is access to one-of-a-kind properties, exclusive enclaves, and lifestyle cachet. Florida and California continue to dominate despite climate and insurance risks, underscoring the power of brand-name locations. To win in this space, agents should craft narratives around pedigree, privacy, and prestige. In the luxury market, perception often carries as much weight as square footage.

Schematics

The news that just missed the cut

• What the government shutdown could mean for real estate

• This week in October is the best time to buy a home 

• How to sell more homes without posting more videos

• Build momentum in your real estate business using email

• This was the priciest deal of the year in the Hamptons

Foundation Plans

Advice from James and David to win the day

It’s hard to believe, but there are only three months left in 2025. As we always say, the new year doesn’t begin in January — it begins now. The agents who thrive in 2026 are the ones already putting the pieces in place today. That’s why we encourage you to start building your business plan now, not later. Here are five keys to making an effective plan:

1. Create SMART goals – This stands for goals that are Specific, Measurable, Achievable, Relevant, and Time-bound. Every goal you set should meet this standard, whether it’s a big annual target or your daily prospecting number. SMART goals keep you grounded in reality while still stretching your potential.

2. Put it in writing and keep it visible – A business plan works best when it’s short, sharp, and always in sight. We recommend one page you can post at your desk, in your car, or even save as your phone wallpaper. Review it daily or weekly, and let it guide your decisions — saying yes only to what supports your plan, and no to distractions.

3. Build in accountability – Share your plan with someone you trust. It’s easier to stick to a plan when others are aware of it. At our firm, every Monday, the entire team meets to review progress on goals. That structure works, and it can work for you, too.

4. Track and measure progress – Plans only matter if you know where you stand. Use a CRM, a spreadsheet, or even a journal to record numbers weekly: calls made, appointments set, deals closed. Numbers don’t lie, and they’ll show you exactly where to focus your energy.

5. Adapt and refine – A good business plan isn’t carved in stone. Markets change, life changes. That’s why we recommend quarterly reviews. If something’s not working, revise your approach. The point isn’t perfection — it’s steady improvement.

This week’s action step: take 20 minutes to write down your top three goals for 2026. Make them SMART, and put them somewhere you’ll see them every day.

This is just the beginning. Over the next few editions, in addition to continuing our series on lead generation, we’ll walk you through concrete steps to help you sharpen your business plan, prepare for the year ahead, and hit the ground running in January. The groundwork you lay today will determine the success you see tomorrow. Message us with questions. We want to help you succeed!

Get scroll-stopping real estate content in minutes a week with the Agent Growth Program

Estate Media’s Agent Growth Program was built to take content creation off your plate—so you can stay focused on what you do best. With just 15 minutes a week, our team delivers up to 25 high-performing short-form videos monthly, customized for each platform and designed to drive engagement, reach, and the kind of real leads sustainable business is built on.

Spots are limited in the first phase of this program, and early access is available now exclusively to the Estate Media community.

Just in Case

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

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Don’t let events or other people set your agenda, friends. Stay ruthlessly focused on your goals — your time is limited, and you only get one life. Make the most of it. Have a great week. We’ll see you on Friday.

- James and David