Luxury Real Estate Outlook - Generational Shifts
This report is re-shared with permission from Sotheby’s International Realty.
The transfer of an estimated $84 trillion in wealth between older and younger generations is driving change in the market for high-end homes
The global real estate market has seen some dramatic shifts over the past five years, driven by fluctuating interest rates and the work-from-home revolution sparked by the global COVID-19 pandemic. The luxury property sector is somewhat insulated from things like interest rate changes, according to market experts including J.P. Morgan Private Bank. But a factor that could impact it is a massive intergenerational transfer of wealth on the horizon.
According to a January 2022 report from consulting firm Cerulli Associates, by 2045 as much as US$84 trillion will have flowed from the Silent Generation and Baby Boomers—those born between 1928 and 1964—into the bank accounts of their children and grandchildren. In response, the luxury market is changing to reflect the tastes and preferences of younger generations.
Many young buyers are using an inheritance to purchase their first home or to trade up to their second, according to an April 2024 report from the National Association of Realtors (NAR). Wealthy parents are also buying homes for their adult children, in some cases with money placed in a trust, according to a November 2024 report by Business Insider.
At the same time, women are coming into their own as independent homebuyers. They outnumbered single men by 12%, according to a November 2024 NAR report. These major trends are not only affecting the post-pandemic luxury market—they may help to define it for years to come.
Overlooking the Gulf of Mexico from a sugar-sand beach, this custom six-bedroom home combines sophistication, comfort, and breathtaking vistas from nearly every room.
Scenic Sotheby’s International Realty
The Rise of Generation X
According to the 2025 Sotheby’s International Realty agent survey, the fastest-growing group of luxury-homebuyers is Generation X—those born between 1965 and 1980. They are expected to inherit the most money from their parents, an estimated US$30 trillion, according to data from consulting firm Cerulli Associates. Making up 24% of homebuyers in 2024, according to the NAR report, Generation X is also among the highest earners, with a median income of US$126,900 in 2023, which makes them able to afford larger homes, at a median size of 1,940 square feet.
“Many Gen Xers are now well into successful careers, and the work-from-home revolution is partly shaping their needs,” says Cathy Taub, global real estate advisor, Sotheby’s International Realty - East Side Manhattan Brokerage. “In New York City, Gen Xers want layouts with office space separate from the living areas and bedrooms,” Taub says. “They prefer to have square footage allocated to kitchens and living areas as opposed to bedrooms—though they all seem to want a five-fixture bathroom. Outdoor space—whether a terrace, balcony or communal building roof space—is often a top priority, as well as amenity spaces for fitness and conference space.”
As the next to reach retirement age, Generation X is also starting to look at homes that will accommodate them in later life, according to an April 2024 report from The New York Times.
Drawn by larger square footage and outdoor space, some buyers are seeking homes in the Garden State. As Dennis McCormack, broker and managing partner, Prominent Properties Sotheby’s International Realty, which has three locations in northern New Jersey, states, “Just 17 miles from Midtown Manhattan, the suburbs of New Jersey can provide a luxurious sanctuary for city workers.”
Sotheby’s International Realty agents who cited Generation X as the fastest-growing demographic of homebuyers.
Source: 2025 Sotheby’s International Realty agent survey.
53%
His clients haven’t slowed their purchasing due to high interest rates, as they might have in the past, he says, since nearly all of them are buying in cash. About half his buyers work in finance, while many others are medical professionals.
“Everybody wants new builds,” he says. “They don’t want to renovate. That means there are some very good deals for people who don’t mind rolling up their sleeves and renovating a bathroom and a kitchen. But my clients’ time is valuable and they would rather pay a premium for a new property.”
One major concern for McCormack’s Generation X buyers is that they get the smartest home they can find on the market. “The more automated it is, the more it can do for you, the better,” he says.
A masterpiece of modern architecture, this state-of-the-art home in Madrid, Spain, has stunning 360-degree views.
Madrid Sotheby’s International Realty
Wealth transferring from the Silent Generation and Baby Boomers to younger generations (in US$).
Source: Cerulli Associates.
$84 Trillion
A quarter of new developments in Pérez Bravo’s market, she points out, are focused on luxury, which is higher than ever before. “International buyers are now taking a look at Spain and finding this is the moment to buy, because prices are increasing,” she says.
“Parents are thinking this is a good way to transfer wealth to their children, especially in terms of tax advantages,” Pérez Bravo says. “They also know that real estate is a hedge against financial instability and can help them to diversify their investment portfolio. People throughout the Latin world, from Mexico, Venezuela and Miami, are happy for their adult children to study or start a company in Madrid, and they know it has some of the world’s greatest cultural assets.”
Pérez Bravo says there is a noticeable difference in the preferences of the older and younger generations when it comes to property. Whereas parents are more likely to emphasize location and to think of the home as a status symbol, their children are thinking more about the lifestyle the home will afford them. They may put a priority on being close to a golf course or premium shopping, for example. These buyers are driving up the luxury market in parts of cities where the older generation might not have considered living.
Parents Buying for Children
The current luxury market is a family affair. According to a September 2024 report by U.K. financial services firm Legal & General, gifts from family members to buy property are at a record high, with 42% of properties bought in the U.K. in 2024 by people under 55 being financed with help from parents. By 2026, the firm estimates the annual amount given will reach £11.3 billion [US$14.8 billion]. This trend can be seen in other markets, too, including New York and Spain.
“In the past, Spain was never considered a luxury market compared with France, England or Italy, but in the past two years there has been an amazing change,” says Paloma Pérez Bravo, CEO, VIVA Sotheby’s International Realty. “Developers and everybody else have come to understand that it’s about lifestyle—not just the property itself but everything around it.”
“
DEVELOPERS HAVE COME TO UNDERSTAND THAT IT’S ABOUT LIFESTYLE—NOT JUST THE PROPERTY ITSELF BUT EVERYTHING AROUND IT
”
Paloma Pérez Bravo, CEO, VIVA Sotheby's International Realty
Another issue that mainly concerns the younger generation is sustainability. They want a home that is “green and respectful,” says Pérez Bravo. While E.U. countries already have stringent environmental legislation, the younger generation is happy to go above and beyond.
Back in New York City, Taub is also seeing a rise in parents opting to buy rather than rent properties for their children. “Given how tight the rental market has been and how attractive cash sales are for sellers, foreign buyers are opting to purchase rather than rent condos for their children,” says Taub.
Recently passed regulations have also influenced the growth of cash sales. “The 2019 tenant protection legislation prohibits landlords from accepting more than one month’s rent and one month’s security, and it is more difficult for foreign investors to rent property in the U.S. if they don’t have a credit history in the country, U.S. tax returns and other documentation required by landlords,” says Taub.
Family Fundings.
Source: Legal & General.
42%
of surveyed U.K. homebuyers aged under 55 in 2024 had parental help.
$14.8 Billion
will be given by parents to help their children buy homes by 2026 (in US$).
The Rise of Women Doing It For Themselves
Back in 1981, couples made up 73% of U.S. homeowners, according to data released in November 2024 by NAR. Over the ensuing three decades, that proportion fell to 62%. In the same period, single-woman homeownership rose from 11% to 20%. A similar gender shift holds for luxury property, especially among younger buyers.
Women’s presence in the high-end housing market is set to increase, despite an enduring gender pay gap overall. According to McKinsey & Company research cited by Bloomberg news in December 2024, women are expected to be in charge of US$34 trillion, or about 38% of all investable assets in the U.S. by 2030, and in a December 2024 speech, Ida Liu, global head of Citi Private Bank, said women will control over 50% of the global wealth market in the next five years. What’s more, data from a March 2024 report from the Bank of America Institute indicates that the coming intergenerational wealth transfer “will contribute to women controlling more wealth than ever before.”
“We are seeing more women than ever purchasing homes,” says Marsha Burke, global real estate advisor, Scenic Sotheby’s International Realty on Florida’s Emerald Coast. She adds that women now represent about 20% of her clients. Burke’s real estate territory includes some of the best beaches on the Gulf of Mexico, and the beauty of the surroundings is a major attraction for these buyers. “They are financially savvy and know what they want,” she says. “Financial autonomy is the overarching theme that has propelled the number of women purchasing their own homes.”
“From personal experience, younger women are motivated to purchase their own homes in part because of the opportunity to build wealth,” Burke says. “Some of the considerations for younger women are long-term safety and security, as well as a space to work from home. They tend to value areas where they will be able to create community connections and lead active lives.” And these women are ready to stand up for themselves, she says.
“I have had several experiences where women are willing to walk away from the negotiating table if their goals are not being met, both on the sale and the buy side,” Burke says. “Gone are the days when there is a difference in negotiating with women versus men. Many women tap into their career experience and are empowered to take on the home-buying process.”
According to a November 2024 report by NAR, the ages of homebuyers also reached all-time highs last year, with the median buyer age hitting a peak of 56 years old. While the typical first-time buyer was around 38 years old, NAR found some 50% of repeat buyers were 61 years or older. Among them are older single women who are downsizing and moving into homes that are more tailored to their needs. “Some are in their second half of life—they’ve lost a spouse or are divorced and have the wealth to make a choice about where they want to live,” Burke says. Many are looking for an active lifestyle, so they look for access to features such as beaches, gyms and biking and walking trails and opt for buying a new home rather than moving into an assisted living facility.
While she offers a full range of services to all her clients, Burke adds that women buying on their own may be looking to their real estate agents for something distinct. “They’re looking for a partner to walk them through the process,” she says. “Even once they’re in their new home, we can help them make social connections. I don’t look at it as a sales role—I look at it as a partnership to help them find a home that’s going to make them happy for years to come.”
On the West Coast of the U.S., Lori Berris, global real estate advisor, Sotheby’s International Realty - Beverly Hills Brokerage, also represents many senior women. “They are often looking for properties in gated and secure communities,” she says. “They also want grounds, so they move into 20-acre complexes. They want resort living but in the middle of the city.”
And while they may be downsizing their individual residences, they still want space for their treasured possessions. “My clients bring their art, sculptures and furniture,” says Berris. “At one of my Century City complexes, I feel like I’m at the Los Angeles County Museum of Art.”
Perhaps only one thing about the luxury housing market is certain—that it won’t remain static. Experts continue to watch interest and mortgage rates closely, even as trillions in wealth, some of it in the form of luxury properties, will shift from older generations to younger. Meanwhile, women will continue to assert their own place in the market, fueled by an increasing concentration of wealth. Add evolving technology and an increasing demand for smart homes by Generation X buyers and what seems undeniable is that the luxury market will continue to evolve in exciting ways.
Homeownership by women versus couples.
Source: National Association of Realtors.
