Sotheby’s: Luxury Real Estate Market Expected to Remain Strong in 2026

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Sotheby’s International Realty, Madison, N.J., released its 2026 Luxury Outlook report, predicting that the market will continue its upward trajectory in 2026.

“The overall real estate market was more impacted by elevated interest rates and affordability issues, but the luxury real estate market is positioned for continued outperformance. Building on 2025’s robust foundation, the luxury market is seeing increased inventory, growing international homebuyer activity, and a larger percentage of all-cash sales, particularly at the higher end,” said Philip White, president and CEO, Sotheby’s International Realty. “We expect global sales to strengthen, as luxury property buyers–the strongest segment of the market–are less constrained by geography.”

Prices that cross the threshold into the luxury market have seen significant increases over the past decade. Per Realtor.com, the minimum for a luxury home in the U.S. now starts at $1.3 million and is much higher in some markets, Sotheby’s noted. That compares with the entry point for a luxury home in 2016–$796,922 nationally.

High-end luxury starts at $2 million and ultra-luxury is defined as homes above $5.4 million.

In many instances, luxury purchases aren’t intended as primary residences. Looking globally, Sotheby’s found that 28% of luxury homebuyers are looking for second-home ownership, 10.5% were for investment rental income and 10% were investment capital growth. In some areas in the U.S., numbers for second-home seekers were even higher. In Florida, 54% of luxury purchases were intended to be second homes.

There is also significant demand in the U.S. from international buyers–foreign buyer activity in 2025 grew 44%. Florida, California, Texas and New York saw the most traffic.

Sotheby’s pointed to a number of factors that could affect the luxury market in the coming year–and potentially moving forward. For one, money is currently changing hands. Generational wealth transfers hit $6 trillion in 2025, amounting to 10% of global GDP. And in some cases, multi-generational living–whether for primary or secondary residences–may fuel luxury purchases.

Additionally, major sporting events, such as the 2026 FIFA World Cup and 2028 Los Angeles Olympics may boost some markets, albeit temporarily.