Are luxury homes getting smaller?
Dubbed “shrinkflation,” the size of the average $1 million dollar home has rapidly shrunk to 2,350 square feet in 2022, after peaking at 3,021 square feet in 2020. The average home now clocks in at 2,624 square feet after rebounding in July, 397 feet less than the 2020 peak.
While they continue shrinking in size, sales for homes priced at $1 million or more rose from 43,421 in the second quarter of 2019 to 90,110 in 2022, as home prices get pushed higher amid inflation and a shortage of inventory.
Pricey homes also constitute a greater share of the market than ever before. Homes priced in excess of $1 million made up 2.7 percent of single family home sales in 2019, 2.5 percent in 2020, and 6.4 percent in 2022, according to the report.
Bottom Line: Sales of $1 million homes have more than doubled in the past three years, but buyers are getting a lot less than they used to, according to the report released by Zillow Tuesday.