Redefining Luxury Real Estate in Today’s Market

What does “luxury real estate” really mean anymore? A decade ago, a million-dollar price tag almost automatically meant luxury. But in today’s market, that’s no longer the case. Thanks to migration patterns, pandemic-era price surges, and regional shifts, the entry point for luxury has climbed steadily—and $1M simply doesn’t carry the same weight it once did.

Back in 2016, a $1M home sat comfortably in the top 10% of the market. Today, that same price point only ranks in the top 13%. To reach the same threshold as before, you’d now need a $1.6M home.

Breaking Down the New Luxury Tiers

According to the latest update from Realtor.com, it’s more accurate to measure luxury by percentiles rather than just raw price tags. Here’s how the breakdown looks nationwide:

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

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

• 99th percentile: Ultra-luxury begins near $5.5M

These benchmarks show how much the definition of “luxury” has shifted—and why it’s important to view homes relative to their market.

Why Luxury is Relative to Location

A million-dollar home in Santa Clara, California, may look completely different than a million-dollar home in Knoxville, Tennessee, or Toledo, Ohio. That’s why percentiles are such a valuable tool—they create consistency across markets by showing where a property ranks compared to others in the same area.

Comparing to Median Home Prices

Another way to view luxury is by comparing price tiers against the typical home listing:

• Nationwide, luxury homes start at about 2.9 times the median price

• High-end luxury begins at 4.6 times the median

• Ultra-luxury sits at a staggering 12.6 times the median

This helps put luxury into context: it’s not just about the dollar amount, but how far a property rises above the norm in its market.

The Takeaway

Luxury is no longer a fixed number—it’s fluid and ever-changing. What’s considered luxury in one city may be an average price point in another. For buyers, sellers, and investors, understanding these nuances is key.

As an agent, I see this every day in East Tennessee. A million-dollar listing here offers an entirely different lifestyle than the same price tag in markets like Miami or Los Angeles. That’s why success in the luxury space comes from knowing not only the numbers, but also how they compare to the market around them.