They just don’t make them how they used to. At least, not for $1 million.
Million-dollar homes have been shrinking since spring 2020, according to new analysis from Zillow. The median home selling at or near $1 million in 2022 is almost 400 square feet smaller than the median two years ago. The homes “peaked” at 3,021 square feet in 2020 and now average 2,624 square feet, Zillow found.
That’s true across the country, with the largest square footage declines in Phoenix and Nashville. The median million-dollar homes lost 1,116 square feet and 1,019 square feet in those metro areas, respectively, between 2019 and 2022.
Since 2019, sales of homes costing $1 million specifically have more than doubled, per Zillow. That follows a broader national trend of rising prices amid heated competition since the start of the COVID-19 pandemic: The median cost of a U.S. home in July was $412,198, compared with $288,388 in January 2020, according to Redfin.
“Sales for expensive homes soared while buyers in the heat of competition accepted smaller layouts,” Anushna Prakash, economic data analyst at Zillow, said in a statement.
Zillow says this is another example of “shrinkflation,” or when the size or quality of something decreases while the price stays the same or increases. It’s an iteration of the inflation that’s been plaguing the U.S. and many other countries over the past year.
Not only are the homes selling for $1 million smaller than they used to be, they are also older and have fewer bathrooms. Before the pandemic, the size of homes costing around $1 million was actually increasing, according to Zillow.
“Even wealthy homebuyers have not been immune to the effects of a hot housing market, as they have lost space and are paying for older homes than they did three years ago,” Zillow’s report reads.
That said, things are starting to shift. Now that interest rates have risen and there still isn’t much inventory, competition is starting to slow.
“Buyers who have regained some negotiating power may find it easier to strike a deal for a larger home that has that extra powder room heading into the third quarter,” reads the report.
And there are still relative deals to be had: In St. Louis and Minneapolis, $1 million will buy you more square footage than it did a few years ago.