Even million-dollar home buyers, who are no longer a rarity in many cities as prices zoomed during the pandemic, are feeling the pinch of “shrinkflation.”
This 4,511-square-foot modern style home by Newmark Homes in the Bridgeland community in Cypress is on the market for just under $1 million. The house offers five bedrooms and five and a half baths.
“Buyers with seven-figure budgets shopping for homes during the pandemic were doing so coming off the longest period of economic growth in U.S. history and with the help of historically low interest rates,” said Anushna Prakash, economic data analyst at Zillow. “Sales for expensive homes soared while buyers in the heat of competition accepted smaller layouts.”
The median size of a million-dollar home in Houston is 3,831 square feet, costing $261 per square foot, compared to 2,624-square-feet nationally and a cost of $381 per square foot. “It’s not unusual to have a 4,000-square-foot house pushing $1 million now,” Newton said. “The price per square foot has jumped over $200 easily, especially in a lot of nicer new construction neighborhoods.”
Houston followed the trend. Sales of homes for $1 million or more accounted for 3.7 percent the sales in the second quarter, up from just 1.8 percent of the market in the second quarter of 2019.