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Residential
Texas

Shrinkflation hits Texas real estate

The average $1M home is smaller, with fewer bathrooms than in 2019

(Illustration by Kevin Cifuentes for The Real Deal with Getty Images)
(Illustration by Kevin Cifuentes for The Real Deal with Getty Images)

Texas — where everything is supposed to be bigger — is facing a ‘shrinkflation’ epidemic that’s now affecting the size of homes.

Since the pandemic, homebuyers have flocked to the Lone Star State hoping to find more space for less. However, Zillow is now reporting that the typical home priced between $950,000 to $1,050,000 shrank in nearly every major metropolitan area between 2019 and 2022. In fact, the only metros where the size of a typical $1 million home grew during this time were St. Louis and Minneapolis.

The average size of a million-dollar home sold in Austin shrank from 3,750 to 2,900 square feet between 2019 and 2022 — a nearly 23 percent drop. The average million-dollar home in Dallas-Fort Worth shrank by almost 21 percent, going from about 4,800 to 3,800 square feet. Lucky for Houston, million-dollar homes there only shrank by 5 percent.

Bathrooms were found to be the biggest casualty of shrinkflation. Zillow found only four metros where the average million-dollar home had the same number of bathrooms between 2019 and 2022. Austin’s million-dollar homes had fewest bathrooms in Texas, averaging 3 bathrooms for homes sold between $950,000 and $1,050,000, whereas Houston and San Antonio had 3.5 and Dallas-Fort Worth had 4.

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“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 influx of big spenders in Austin, particularly, spurred home values to jump 71 percent since mid-2019, dragging many more smaller homes up into the million-dollar price range. In the second quarter of 2022, buyers spent a median of $341 per square foot to get a 2,930-square-foot home.

In terms of million-dollar homes’ share of the market, the Texas metros were way behind the big coastal cities. Homes sold between $950,000 and $1,050,000 accounted for 62 percent of San Francisco’s market, for instance, but the only Texas market where the share of million-dollar homes reached double digits was Austin, with just over 11 percent. In Dallas-Fort Worth, Houston and San Antonio, million-dollar homes made up only 2 to 5 percent of sales.