Where are you seeing this? San Francisco condos run $1077/sqft, more than the most expensive county for single family homes, San Mateo, at $1022/sqft.
Correspondingly the price per square foot in Manhattan is about $1300, while Queens and Staten Island run not even half that.
People may choose to put the savings from less desirable environments into larger homes. But there’s no reason condos shouldn’t be as large as houses. Urban environments are just so scarce that the only way even pretty rich people can get them is to compromise on space.
Housing prices in suburban and rural areas have exploded across North America. People seem to want their own slice of land distant from others.