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  Home  >  Communities  >  Lexington  >  Lexington Market Review  >  Luxury Market Summary

Summary

Consistent with the 2023/2024 Market Review we continue to define the luxury market as homes which sold for $2.5 million or above. With the average home price of $1.9 million in 2024 we will likely increase this threshold to $3 million moving forward as we analyze 2025 sales data.

In recent years, the luxury market in Lexington has been very strong. This is shown by the key performance metrics Days on Market and Sale Price to List Price Ratio strengthening, and by an increase in the number of homes sold. In 2023 these performance metrics declined, consistent with the overall weaker housing market. This was reversed in 2024 with a slight strengthening in performance metrics and an increase in the number of luxury homes sales to 59 in 2024 compared to 49 in 2023 and 55 in 2022. The difference between 2024 and 2023 should be seen as an anomaly caused by the reduction in luxury sales in 2023. The increase in luxury home sales in the two-year period from 2022 to 2024 was only 7%. But this data should be viewed against the overall housing market that saw an 18% reduction in the number of home sales in the same two-year period between 2022 and 2024.

Many sellers of existing homes worry about the impact of new construction on the luxury market. The primary impact of these new homes is that buyers of existing homes will expect a similar quality to new construction. Given the characteristics of the luxury market and the new construction component of it, it’s important to focus on the fundamentals – home preparation, great staging, a comprehensive marketing plan, and the right pricing strategy are key to having buyers consider an existing home versus new construction and obtaining the maximum price for your home.

Luxury Home Sales

The number of homes sold in the luxury market sector in 2024 was 59 compared to 49 in 2023 and 55 in 2022. As noted above, this increase in luxury home sales in the two-year period from 2022 to 2024 was 7%. But this data should be viewed against the overall Lexington housing market that saw an 18% reduction in the number of home sales in the same two-year period between 2022 and 2024.

The luxury market in Lexington mirrored the overall luxury housing market in Massachusetts with fewer luxury home sales in 2023 and a return to 2022 levels, or higher, in 2024. In 2022 there were 937 luxury homes sold in Massachusetts. In 2023 only 741 luxury homes were sold. In 2024 there were 951 luxury homes sold in Massachusetts. This is only a 1.5% increase for the two years between 2022 and 2024 compared to a 7% increase in Lexington over the same period. 

Average Days on Market

The Days on Market for the luxury market was relatively high at 69 days when compared to the overall market (37 days) but is consistent with the years immediately before COVID. In 2022 the average days on market was 40, in 2023 this increased over 50% to 82 days. This increase in days on market can in part be explained by the 2022 oversupply (over build) in the new construction market where homes built in 2022 did not sell until 2023. With the over-supply largely sold, days on the market reduced to 69 days in 2024.

Sale Price Distribution

The most noticeable trend in the sale price distribution is the decrease in the number of $2.5 - $3 million priced homes and an increase in the $3 - $4 million priced homes when compared to 2022, ignoring the anomaly of 2023. As noted previously, the average new construction home price increased to $3 million in 2024 and this, in part, explains the change in the distribution.

Looking closer at the high-end of the luxury market data (homes sold over $4 million) points to a potentially strong market in 2025. In 2023 5 homes sold over $4 million, in 2024 4 homes sold, and at the time of writing (January 2025) 3 homes are already Under Agreement in 2025.

Looking at homes currently on the market at the time of writing highlights a worrying trend. 44 $3+ million homes were listed in 2024. 21 $3+ million homes, listed in 2024, were sold or went under contract in 2024. This means that only 50% of the $3+ million homes listed in 2024 were actually sold, it is very likely these unsold homes will come back on the market in 2025 putting downward pressure on prices in this sector of the housing market. Interestingly these statistics were very similar to those seen in 2023.