Luxury buyers shift as AI wealth rises, says The Agency

In a report published last week, The Agency examined trends that are currently impacting the luxury real estate market including multigenerational living, the new wave of AI/technology millionaires searching for properties and how climate change and lifestyle choices are impacting buyer demand. The 2026 Red Paper Mid-Year Report was The Agency’s first ever mid-year luxury report. 

“Let’s be honest, markets don’t wait for year-end to make moves, and we can’t either. What’s emerging now demands attention. The largest wealth transfer in modern history is actively reshaping buyer behavior. Climate is driving permanent relocation. A tech-native generation is entering the market with a new list of non-negotiables,” Mauricio Umansky, the founder and CEO of The Agency, wrote in the report’s introduction. 

Multigenerational living

The first trend identified by the report is the rise in popularity of multigenerational compounds. According to the report, over the next roughly two decades nearly $100 trillion in wealth will be transferred to Gen X and millennials from baby boomers and older generations. 

“With Generation X and millennials projected to inherit so much, a new asset class is emerging: the multigenerational compound. Far more than a large house, this is a “family alignment asset”—a strategic vehicle designed to preserve both financial capital and family connection,” the report states. 

The report found that high-net-worth individuals are beginning to see their properties as assets “designed to preserve wealth, accommodate multiple generations and reinforce long-term family cohesion,” explaining the rise in popularity of the multigenerational compound. 

The report cites a study by the National Association of Realtors (NAR) that found in 2024, 17% of homebuyers purchased multigenerational homes, up from 14% the year prior, with Gen X buyers leading this trend at 21%. The NAR study attributed this increase to savings (36%), care for aging parents (25%) and adult children returning home (21%). 

According to The Agency’s report, homebuyers interested in purchasing a multigenerational compound are frequently looking for things like guesthouses or accessory dwelling units in addition to a primary residence, as well as shared amenities like kitchens or recreational spaces and  working land or income-producing elements. 

The report anticipates interest in this trend accelerating over the next few years, due to the scale of the coming wealth transfer, as well as economic pressures like overall housing affordability and changing cultural attitudes toward multigenerational living. 

“For affluent families, the compound is emerging as a quasi-family office tool—a physical anchor for broader wealth planning. But when structured intentionally, a shared property can also serve as a governance mechanism,” the report states. “Without clear agreements, properties often end up sold or neglected as heirs disagree or drift apart. The compound model attempts to pre-empt that outcome by aligning incentives and expectations from the start.”

The “billionaire effect”

The Agency’s report traces how a single trophy transaction can temporarily distort local pricing, then reset the long-term ceiling for ultra-luxury housing in markets that can sustain demand from ultra-high-net-worth buyers. The report examined how the purchase of a $27.75 million, 1.65 acre bay-front property in Islamorada, Fla. sparked “a shift in seller psychology” and tightened already scarce prime inventory as homeowners waited to see whether the record price would stick. 

The report argues that response is typical. After a headline transaction, nearby owners often anchor to the new price per square foot and assume their homes can command similar numbers, regardless of the unique attributes that drove the trophy sale. Listings come to market at aspirational prices and sit. According to the report, sellers who simply use price-per-square-foot to benchmark their home against a nearby ultra-luxury property ultimately fail because they are ignoring what made the record setting property unique.

However, the report notes that for some buyers price does not matter, so they will purchase a property even if it is potentially overpriced, generating a “repricing cycle” in markets that see several of these transactions. 

Once a destination repeatedly validates ultra-luxury price points, the report argues, wealth reshapes the local ecosystem. In the Florida Keys, the report said the higher-end demand is encouraging investment in marinas, private aviation access and white-glove, concierge-style service. These shifts matter to developers and operators planning future product, as standards for “acceptable” luxury continue to rise.

Affordably luxury

The report also found that the demand for so-called “affordable luxury” homes between roughly $1 million and $5 million has surged in both North American and Europe. However, inventory has not kept pace, creating longer marketing times in some regions, price pressure in others and a widening mismatch between what equity-rich buyers can afford and what is actually for sale. 

In the report, The Agency cites Realtor.com data that pegged the national luxury threshold at $1.2 million in April 2026. Across the U.S., homes priced from $1 million to $5 million are drawing substantial interest, particularly in the $1 million to $3 million band, where many move-up buyers have the income or equity to participate but are constrained by limited options.

Compared with 2021, U.S. homes in the $1 million to $2 million range sold at a median $479 per square foot in early 2026, up from $455, according to Realtor.com. Properties in the $2 million to $5 million tier averaged $790 per square foot, up from $730 five years earlier, and are selling 12 days faster than in 2021.

Those gains are being propelled by a larger upper-middle-class cohort and substantial home equity growth. The American Enterprise Institute estimates 31% of Americans now qualify as upper middle class, up from 10% in 1979. Since 2020, U.S. home equity has climbed 142%, and three years of stock market gains have added purchasing power at the top end, according to The Agency’s report.

At the same time, market snapshots from Anchorage, Bend, Dallas, Marblehead and Hilton Head show that price tiers and days on market diverge significantly by region. Ultra-luxury homes are achieving record prices per square foot but are facing a notable slowdown in sales velocity, while the $1 million to $5 million segment remains relatively more liquid in many metros, according to the report. 

For existing luxury owners looking to trade up into the $5 million to $10 million range, this dynamic can create a window: strong buyer depth for their current home class and more negotiating leverage higher up, where listings often linger, The Agency said.

Latin America emerges

Global residency-by-investment programs are steering capital toward value-oriented, developing and secondary markets in Latin America and Europe, as affluent buyers prioritize stability, lifestyle and “plan B” residency options over pure return-on-investment calculations, according to the report. 

The Agency’s analysis finds that geopolitical uncertainty and policy changes are reshaping how wealthy buyers use real estate to secure residency. Instead of simply arbitraging the lowest price of entry into a passport or visa, today’s buyers are gravitating toward jurisdictions offering a mix of value, quality of life, legal stability and long-term optionality.

According to the report, Latin America offers consumers affordability, infrastructure and residency access. Markets that are seeing an influx of U.S. buyers include Nicaragua, Costa Rica, Mexico and Panama, according to the report. 

Next Gen luxury buyers

A new wave of AI and next‑gen tech wealth is entering luxury real estate with very specific expectations: move‑in‑ready homes, compressed search timelines, high-end wellness and tech features, and maximum privacy, according to the report.

Since the commercial breakout of AI tools after ChatGPT’s 2022 launch, a growing cohort of young founders and early executives has begun reallocating liquidity into property. Agents across New York, California, Toronto and Nashville report that these buyers behave differently than prior dot‑com and social media cycles, both in how fast they move and what they will tolerate in a home.

According to the report, this cohort of buyers treats the home search process as an exercise in efficiency, making things like high-quality photography and marketing copy even more important for sellers looking to make a strong first impression. Additionally, the report said that once these buyers are interested in a property they typically want immediate access to the home for a tour, after which they either pass on the property or make an offer. 

At the highest price points, some buyers skip initial tours altogether, sending a personal or executive assistant to pre‑screen properties and narrow the list, the report said. 

In supply‑constrained markets like San Francisco, that behavior can translate into aggressive bidding. Agents at the firm told The Agency that well‑positioned homes are still selling quickly and in some cases “egregiously over list price” when they align with this cohort’s criteria.

According to the report, this new cohort of AI-wealth buyers place high value on things like turnkey homes, wellness spaces like dry and steam saunas, cold plunges, Zen gardens, koi ponds and floor plans that carve out full‑floor sanctuaries, backup generators, newer HVAC systems and privacy and security features. 

However, the report cautioned that the AI wealth cycle is still early and agents are just at the beginning of understanding what these buyers are looking for. 

Lifestyle buyers

The report also found that climate volatility, political fatigue and the rise of remote work are pushing affluent buyers to swap traditional hubs for lifestyle-driven markets such as the Caribbean, central Mexico and Aspen, turning what were once seasonal vacation spots into primary or near-primary residences. 

The Agency’s managing partners across Turks and Caicos, the Cayman Islands, San Miguel de Allende and Aspen report that ultra-high-net-worth clients are extending stays from a few months to most of the year, or relocating altogether. The new calculus blends weather stability, quality of life, tax and policy considerations, and the ability to work from anywhere.

According to agents serving these markets, the draw is less about postcard winters and more about dependable conditions amid unpredictable winters and summers. Other real estate professionals serving these markets say that over the past decade conversations with buyers looking for homes in these areas have evolved from clients looking to just escape the winter to looking to escape “everything” from climate disasters and undesirable weather to political and tax concerns in their home countries.

This article was written by Brooklee Han and generated with the assistance of HousingWire Automation, then reviewed by a HousingWire editor before publication.