2026 LUXURY OUTLOOK

*This content originally appeared on LuxuryOutlook.com and has been slightly amended for our blog.*

A tale of two economies

The latest edition of the Sotheby’s International Realty Luxury Outlook report provides insights into trends and developments that affect the global luxury real estate market. Outperforming traditional real estate in 2025, both in sales and increased value,1 we expect luxury real estate to continue that trajectory in 2026.

The report also reveals there are effectively two real estate markets—the luxury market and the general market—which perform differently. That phenomenon is seen not just in real estate but also in banking, finance, and even the airline industry, where Delta Air Lines is focusing its growth in the premium sector, as reported by The Wall Street Journal in October 2025.2 The resilience of the luxury real estate market reflects a premium economic foundation that provides greater stability against volatility.

Sotheby’s International Realty’s research also demonstrates that luxury property buyers are less constrained by geography and macroeconomic factors than other homebuyers. Sustained wealth creation through real estate and equity investments continues to be a key driver of global luxury markets. Some good news from 2025 that bodes well for the luxury real estate market in 2026 is that inventory levels have rebounded to where they were pre-pandemic. A balanced real estate market is healthier and more sustainable, with more options for homebuyers.

To respond to changing market conditions, both home sellers and homebuyers should consider the “first mover advantage”—being the first to act decisively when opportunities arise or shift. This is often seen in development projects that are the first to adjust their pricing. These projects often gain momentum and attract more offers, which snowballs into the development becoming the hottest in the market.

For home sellers, that means pricing realistically rather than opportunistically and considering the potential negative impact of carrying costs if they decide to wait a year or two to sell.

For homebuyers, the “first mover advantage” can mean acting quickly when a once-in-a-generation opportunity arises. In New York City’s West Village, a penthouse recently went into contract for US$87.5 million with Nikki Field of Sotheby’s International Realty - East Side Manhattan Brokerage representing the buyer. The residence is expected to close around early 2027 and will mark a record-setting deal for downtown Manhattan.3

Beyond market dynamics, this year’s report examines the broader forces shaping luxury real estate decisions. We explore how political and economic policies impact the upper end of residential real estate markets, the rising influence of cryptocurrency, fluctuating inventory in the U.S. and global markets, and how major global sporting events can create lasting impacts on the luxury housing markets in host cities when paired with thoughtful urban planning in the wider area.

Today’s wealthy homebuyers are also prioritizing safety and privacy in ways that are reshaping design, from advanced security systems to backup power generators that ensure uninterrupted comfort and protection.

We’re also seeing a meaningful shift toward multigenerational living among wealthy households. This trend is about more than a lifestyle—although clearly one major goal is spending time with loved ones. It is also about long-term estate planning and legacy building, a way homeowners can transfer some of their wealth during their lifetime by building or buying a home for their heirs.

The global perspective of the Sotheby’s International Realty brand’s network provides unique insight into these evolving trends and shifting priorities. Whether it’s luxury housing under construction in Utah or emerging developments in Dubai, the brand’s affiliated agents across these markets offer deep local expertise and comprehensive global knowledge. This worldwide reach enables homebuyers to make informed decisions—wherever their search takes them.

Ultimately, luxury real estate purchases are about much more than a financial investment. They are lifestyle-driven choices shaped by the amenities and experiences in any given location that offer the relaxation, stimulation or comfort that wealthy homebuyers seek both for themselves and for their families.

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