Homes in coveted neighborhoods like Shavano Park, pictured above, are selling at stronger price points in San Antonio, according to luxury real estate agent Binkan Cinaroglu. (Sam Owens/San Antonio Express-News)
San Antonio’s real estate market is experiencing a fork in the road.
While home prices in the lower end of the market continue to drop, the most expensive homes in the metro area are getting pricier, so much so that San Antonio’s market is being described as K-shaped.
A K-shaped market is a widening gap between the higher-priced segment of homes on an upward trajectory and starter homes or entry-level properties on the decline.
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This is largely because luxury homebuyers with higher incomes in South-Central Texas are less affected by higher interest rates, so the home prices of the top 25% of the market have grown consistently over time.
“There are a lot of people in the higher-end market who aren’t rate sensitive,” said Binkan Cinaroglu, a luxury real estate agent for Kuper Sotheby’s International Realty. “One economic factor that has continued to perform well is the stock market, and there are a lot of affluent buyers that make purchases based on the gains that they have in their investment accounts.”
In Austin, where prices are generally higher, that upward momentum for the luxury market is still apparent, just not quite as dramatically as it is in San Antonio.
The K-shaped market also rings true nationally, as averages surpass the median price point in the second quarter.
A Homes.com graph shows the increase in the top 25% of home prices and the decline of the bottom 25% in both San Antonio and Austin between 2023 and 2026. (Homes.com)
Housing market imbalance
Nationally, median and average house prices have been parallel until the mid-1970s, but the average has since climbed. The average price of homes was $502,700 in the second quarter of 2026, influenced by the sale of more expensive homes. This was 22.4% higher than the median of $410,700, according to Forbes.
In the last three years, the median cost of the top 25% of homes by sales price in San Antonio has climbed 13.7% from $545,500 in 2023 to $620,000 presently, according to data from Homes.com.
Conversely, the median price of the bottom 25% of homes has declined 5.4% from $185,000 in 2023 to $175,000 now.
“There’s a lot that happens in the high end that is not recorded or public information,” Cinaroglu said. “The K-shaped market would be even more pertinent when you include all the true data of things that happen.”
The top 25% of the market is typically homes priced around the upper $300,000s to low $400,000s and higher.
In Austin, the median price in the luxury market has increased 5% from $850,000 three years ago to $892,815 currently. On the flip side, the lower end of the market has dropped 12.5% from $315,000 to $275,750.
“In Austin, where prices are higher, that upward momentum for the top 25% is still apparent, just not quite as dramatically as it is in San Antonio,” said Danny Khalil, director of market analytics for Homes.com. “Austin’s higher baseline is likely the major factor here.”
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Demand, supply and affordability are affecting the high and low ends of both markets in different ways, spurring this divergence.
Mortgage rates have remained elevated in recent months as overall inflation is driven by surging oil and energy costs in the wake of the Iran war. While rates aren’t as high as they were in 2025, buyers looking for an affordably priced home have been cautious amid the ongoing economic uncertainty.
On the other hand, higher-income homebuyers with deeper pockets aren’t as financially constrained.
If fewer affordable homes sell while more expensive homes continue securing contracts, the citywide median can rise even if individual properties are not appreciating. In July, San Antonio’s median sale price was $315,000, according to Homes.com.
Supply also can be a driving factor for the K-shaped market. New construction has created competition for affordable existing homes due to the incentives homebuilders can offer buyers. This, in turn, can drive prices of existing homes down to keep up with the discounts that new builds are able to offer.
At the same time, the scarcity of luxury homes, such as in areas like Alamo Heights and Shavano Park, can drive prices up.
“One thing I’ve seen in the higher-end market is that good homes are hard to come by and because of that, those homes move very quickly and at a strong price,” Cinaroglu said.
Luxury market
The luxury market previously was defined as homes priced at $1 million and up, but as prices, interest rates and overall housing costs have shot up, the value of $1 million doesn’t go as far as it once did pre-pandemic.
“When I started in the business, even all the way to 2015-2016, if you had $1 million to spend on a house, you were going to find a great luxury house with space, a pool, etc.,” Cinaroglu said. “Today, if your budget is $1 million, that has shifted more toward smaller homes, smaller lots, not as much products. If you go to the suburbs, like Stone Oak, you get more bang for your buck, but if you talk about Shavano Park or Alamo Heights, $1 million doesn’t go very far.”
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Cinaroglu said the average time on market for luxury properties is between 90 and 120 days. Those listings that are lingering longer typically are older, with outdated styles, such as columns, tile roofs, and brown and yellow hues. The coveted luxury homes are in prime locations and have more contemporary designs, with cleaner lines and good bones.
The luxury agent said it’s unusual for San Antonio to have a K-shaped market, largely because the metro just recently established its luxury market.
“Compared to Dallas, Austin and Houston, the real luxury market in San Antonio is newer,” he said. “Right after COVID, prices went up, and a lot of people came to San Antonio. I think our city is growing, and it’s spurred a lot of wealth creation here, which in turn has grown the luxury market.”
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This article originally published at San Antonio home prices split as the luxury market pulls ahead, creating a K-shaped market.
