Luxury Home Sales Slowed in Major Markets Across the United States

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Picture a grand waterfront estate in Holland, Michigan, its pristine lawn kissed by Lake Michigan's breeze, yet its “For Sale” sign stands untouched through another season. Farther south, in Naples, Florida, a $2 million condo with Gulf views hosts sparsely attended open houses. The luxury real estate market, once ablaze with competitive bids and swift closings, is cooling in key regions like Michigan and Florida. This slowdown, felt in West Michigan's lakeshore communities and Florida's coastal enclaves, reflects broader economic shifts and new industry rules. What's behind this change, and how are buyers, sellers, and proptech innovators adapting to a transformed high-end housing landscape?

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A Slowing Tide in Luxury Real Estate

The data paints a clear picture. In West Michigan, the Grand Rapids Association of REALTORS® reported slower absorption rates for homes priced above $750,000 during the summer of 2025. Holland's lakeshore properties, long a draw for affluent buyers seeking tranquility, are experiencing fewer multiple-offer scenarios, a stark contrast to their historically robust demand. In Florida, markets like Miami-Dade and Naples mirror this trend, with homes priced over $1 million lingering longer on the market, according to local real estate boards. This isn't a market collapse but a recalibration, driven by rising borrowing costs and regulatory changes.

Mortgage rates, now exceeding 7% for many loans, are squeezing even high-net-worth buyers. A $1.5 million mortgage carries significantly higher monthly payments than it did two years ago, prompting caution among those accustomed to decisive purchases. Compounding this is the impact of new commission rules following the National Association of Realtors (NAR) settlement. These rules mandate transparent commission disclosures, altering how fees are negotiated and paid, which introduces uncertainty for both sellers and agents navigating luxury listings.

Regional Impacts: Michigan and Florida

West Michigan's luxury market thrives on its unique blend of natural beauty and urban accessibility. Grand Rapids, with its burgeoning cultural scene, and Holland's serene lakeshore have long attracted buyers from Chicago and other urban centers. However, 2025 data shows a decline in year-over-year transactions for waterfront properties in Holland and Saugatuck, despite steady tourism. Sellers who once anticipated fierce bidding wars are now contending with price reductions, with some homes sitting unsold for months, according to local market reports.

In Florida, the luxury market faces similar headwinds. Sarasota's high-end condos are seeing slower sales as inventory grows and buyers hesitate, wary of overpaying in a shifting market. Naples, a magnet for retirees and second-home buyers, reports extended days on market for multimillion-dollar properties. Recent analysis indicates that the new commission rules haven't significantly reduced costs for buyers or sellers, dispelling hopes of immediate savings. Instead, buyers are gravitating toward smaller, tech-forward homes equipped with smart systems and energy-efficient features, moving away from traditional sprawling estates.

This shift reflects broader buyer priorities. In Michigan, demand is growing for properties that blend luxury with sustainability, such as homes with solar panels or advanced home automation. In Florida, waterfront condos with community amenities are gaining traction among retirees seeking low-maintenance luxury. These trends signal a market adapting to new economic realities and buyer preferences, even as sales slow.

The NAR Settlement: Redefining Commissions

The NAR settlement has fundamentally altered real estate transactions. Historically, sellers covered the buyer's agent commission, typically 5-6% of the sale price, as a standard practice. Now, commissions are fully negotiable, and transparency is mandatory, requiring clear agreements on who pays what. Negotiation strategies emphasize discussing commission splits upfront to avoid surprises at closing. For sellers, this could mean lower profits if commissions remain high; for buyers, it may involve covering their agent's fee, which can inflate closing costs significantly.

In Michigan, sellers are increasingly turning to digital-first brokerages to reduce costs and enhance visibility. Proptech platforms offering virtual staging and immersive 3D tours are becoming critical tools, helping listings stand out in a competitive market. In Florida, where international buyers remain a significant force, realtors are using data analytics to target out-of-state investors, particularly from the Northeast. However, agents face challenges: lower commissions may reduce their incentive to prioritize high-end listings, potentially slowing sales further, as noted in industry discussions.

These changes aren't without growing pains. Sellers in West Michigan report fewer showings as agents adjust to new commission structures, while buyers in Florida express concerns about unexpected closing costs. Industry insights suggest that clear communication about fees can build trust, but the transition requires both parties to navigate a learning curve. Misconceptions, such as the belief that agents now work for free or that commissions are universally lower, are common and must be addressed to avoid confusion.

Proptech's Role in a Changing Market

Amid the slowdown, proptech is emerging as a lifeline for the luxury market. In West Michigan, platforms are targeting remote-work professionals seeking lakeshore retreats, offering tools like commission calculators and virtual tours to streamline decisions. In Florida, these technologies appeal to downsizers and international buyers, who value transparency and efficiency. By providing data-driven insights and immersive experiences, proptech helps bridge the gap between cautious buyers and sellers eager to close deals.

Market segmentation offers another avenue for growth. In Holland, properties with eco-friendly features, like smart thermostats or energy-efficient designs, are finding favor with buyers prioritizing sustainability. In Florida, condos with access to shared amenities think pools, gyms, and concierge services are drawing retirees wary of maintaining large estates. These niches allow sellers to target specific buyer segments, enhancing appeal in a slower market.

Proptech also addresses the transparency demanded by new commission rules. Tools that clarify fee structures or simulate closing costs empower buyers and sellers to make informed decisions. For out-of-state buyers eyeing Michigan's affordability or Florida's coastal allure, these platforms provide a competitive edge, ensuring listings reach the right audience with minimal friction.

Looking Ahead: A Market in Transition

The luxury real estate market is at a crossroads, with economists from the University of Michigan forecasting subdued sales into early 2026 as mortgage rates stabilize and commission rules solidify. Florida Realtors® anticipate steady interest from international buyers but warn that affordability concerns could temper demand. The path forward demands adaptability: sellers must leverage digital tools to maintain visibility, while buyers should negotiate strategically to navigate evolving fee structures.

In Holland, that waterfront estate may wait a bit longer for its buyer, but with the right technology and transparent pricing, its prospects remain bright. In Naples, the condo market may face headwinds, but savvy investors are poised to capitalize on opportunities. The luxury market isn't fading it's transforming. By embracing proptech and clear communication, buyers and sellers can navigate this evolving landscape with confidence, forging smarter, more transparent deals in an era of change. This post may contain affiliate links to recommended services, such as commission calculators, which may earn us a commission if used.

Frequently Asked Questions

Why are luxury home sales slowing down in Michigan and Florida?

Luxury home sales are cooling due to mortgage rates exceeding 7%, which significantly increase monthly payments even for high-net-worth buyers. Additionally, new commission rules from the NAR settlement have introduced uncertainty around fee negotiations and closing costs. These factors are causing buyers to be more cautious, resulting in longer market times for properties priced above $750,000 in West Michigan and over $1 million in Florida markets like Naples and Miami-Dade.

How have the new NAR commission rules affected luxury real estate transactions?

The NAR settlement has made real estate commissions fully negotiable and requires transparent disclosure of all fees upfront. Unlike the previous standard where sellers typically covered the buyer's agent commission (5-6%), buyers may now need to pay their agent's fee directly, potentially increasing their closing costs. While some hoped these changes would reduce overall costs, analysis shows they haven't significantly lowered expenses for buyers or sellers, creating a learning curve for both parties navigating luxury transactions.

What types of luxury properties are still selling well despite the market slowdown?

Properties with modern, tech-forward features are outperforming traditional sprawling estates in the current market. In Michigan, homes with sustainable features like solar panels and smart home automation systems are attracting buyers, while in Florida, waterfront condos with community amenities (pools, gyms, concierge services) appeal to retirees seeking low-maintenance luxury. Buyers are prioritizing energy efficiency, smart technology, and convenience over sheer size, reflecting a shift in luxury market preferences.

Disclaimer: The above helpful resources content contains personal opinions and experiences. The information provided is for general knowledge and does not constitute professional advice.

You may also be interested in: Real Estate Agents Adapt to New Commission Rules

Home buying or selling shouldn't mean paying for services you don't use or need. Now, with new rules, you can choose exactly what you pay for. Side Door's smart match engine connects you with vetted agents offering flexible service levels, so you pay only for what you use. Keep the guidance, skip the extras, and save thousands and still get the keys in hand. Join Side Door for FREE today!

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