Current data shows that both luxury sellers and buyers looking to close before year-end are well positioned to benefit from today’s market dynamics. Luxury home prices are rising at more than twice the pace of non-luxury homes, driven by financially strong buyers who act decisively. Inventory at the high end has increased slightly but remains significantly lower than pre-pandemic levels, which supports continued pricing strength for well-prepared, strategically marketed properties.
At the same time, easing mortgage rates, improving affordability, and growing seller motivation are creating advantageous conditions for year-end buyers. Strategic timing may also offer financial benefits for the 2025 tax year, particularly for buyers in high-tax regions. Those who are ready, pre-approved, and willing to act with clarity can leverage reduced competition and flexible negotiation opportunities before the calendar resets.
Eric Andersen, B.A., M.Div.
Owner/Designated Managing Broker, Andersen Realty Group
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Transcript:
Luxury homes are setting the pace for today’s housing market. I’m Eric with Andersen Realty Group, and across the US, the typical luxury home sold for $1.26 million in September, a record for that month and nearly 5% higher than a year ago. On the other hand, non-luxury homes only grew by less than 2%. You might think higher-end homes would be struggling more, but they are growing by over double the rate of the broader market. Why is this? It’s driven both by who is buying and how they’re doing it.
Luxury buyers aren’t waiting for rate cuts or price drops. Many are buying in cash or with a small loan. They’re able to do this because they generally have strong portfolios and long-term confidence, which means they aren’t as worried about short-term fluctuations. As one of Redfin’s economist explains: “[Luxury buyers are] not waiting for rates to drop or prices to fall—they have the cash, stock gains, and long-term confidence to act when they see a home they want.” If anything, economic uncertainty has made real estate even more attractive to these buyers, as the housing market is generally a more secure place to preserve capital than, say, the financial markets. Consistent demand, even if it’s from a smaller pool of buyers, keeps luxury prices outpacing the rest of the market.
Luxury home inventory has begun to increase slightly. The number of these homes for sale rose by about 8% year over year, and it’s at the highest September level since 2020. Even so, we have roughly half the number of luxury listings we did a decade ago, so the number of options is still very limited, even if it’s higher in the short-term. This creates an interesting dynamic. There are more choices for serious buyers, and yet, ongoing scarcity keeps prices high for those looking to sell. Time on market is slightly up for these homes and is at an average of 52 days as compared to 46 days last year. All in all, demand remains steady, and homes that aren’t terribly overpriced are continuing to sell.
For luxury sellers, this is an opportune time to list. The gap between luxury and non-luxury growth demonstrates that the higher-end homes are appreciating faster than the broader market. A well-positioned home can set record pricing even as mid-tier listings grow at a more modest pace. Higher stock values and improved liquidity among affluent buyers make this a bullish demographic, and limited supply continues to favor sellers. Those who prepare their homes thoughtfully, price strategically, and market their homes excellently get the best of both worlds: a great bottom line from motivated buyers who can act quickly.
At the same time, the final months of 2025 present a rare window for buyers who are ready to move before the new year. Mortgage rates have dipped below 6.2% for the first time in 12 months, affordability has improved, and sellers in the broader market across the country are showing higher levels of motivation. The market that began the year in a tense standoff has become much more cooperative. Buyers who act now are encountering sellers who are more practical than they have been over the past several years, when buyers were essentially in a hostage situation and forced to meet even the most outrageous demands.
End-of-year market conditions are favorable for the prepared. As many sellers step back for the holidays, inventory usually tightens and competition becomes less intense. While the winter is an excellent time to sell, few sellers choose this time to test the market, often preferring to wait until spring. With fewer buyers out looking, even small concessions can translate into significant savings.
Falling rates are also improving buyer affordability. Economic indicators have been pointing to moderating inflation and a softer labor market, which encourage lenders to price loans more competitively. End-of-year lender quotas can also help qualified borrowers through lower fees or faster closings. A closing prior to December 31 also has the potential to offer benefits for the 2025 tax year. Homeowners in high-tax states like Illinois may see even bigger benefits, and the State and Local Tax deduction cap is set to rise to $40,000 for 2025.
These benefits, coupled with a more accommodating lending environment, make the final weeks of the year a strategic time to act. Energy-efficiency credits for some home upgrades will begin to phase down next year, giving buyers another reason to move sooner rather than later.
The holidays bring logistical challenges, such as longer processing times and limited showing windows as it gets dark earlier, but there are rewards for those who put in the effort. Buyers who are pre-approved, decisive, and flexible can take advantage of this situation and close before the new year. As one lender put it, the goal is not to rush but to recognize when the market quietly turns in your favor.
For luxury sellers, that turn has already arrived. For buyers, it is taking shape, especially at the mid-tier price points. The end of 2025 is shaping up to offer some unique seasonal opportunities for buyers and sellers. If you’d like help with selling or buying a home in the western suburbs, reach out using my contact information, below, and please like this video, share, and subscribe to my channel if you found it helpful. I’m Eric with Andersen Realty Group, a family-owned brokerage where we treat our clients like family.