"Shrinkflation" Has Hit $1 Million Homes—Homebuyers Are Paying More for Less

Daniella Cressman

Disclaimer: This information is accurate and true to the best of my knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

"After two years of double-digit price growth in the housing market, buyers are finding out $1 million just doesn’t stretch as far as it used to." —Sarah Hansen

Even million-dollar homes are not quite as impressive as they used to be: buyers are just not getting the same bang for their buck.

"The typical million-dollar home purchased in the second quarter of 2022 was smaller and older and had fewer bathrooms compared to houses sold for the same amount before the pandemic, according to a new analysis from real estate platform Zillow. In the second quarter of 2019, a $1 million home had a median square footage of 2,900. Three years later, that number had shrunk nearly 10%, to 2,624 square feet." —Sarah Hansen

In short, "shrinkflation" is affecting everything from groceries to million-dollar homes.

"Zillow refers to the trend as “shrinkflation” — a phenomenon that occurs when the price of an item stays the same but the amount you receive gets smaller. It happens to groceries, too, and household goods like paper towels, as inflation pushes prices higher and companies try to recoup some costs. When it comes to the housing market, that shrinkage is the result of a serious imbalance of supply and demand during the pandemic. With fewer homes on the market, buyers faced fierce competition and in many cases ended up paying a lot more money for a lot less house." —Sarah Hansen

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Canadian-American author writing about local politics, personal finance, & dining in Albuquerque.

Albuquerque, NM

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