A Case of …Shrinkage
While home prices have recovered somewhat from their pre-bust days, lot sizes haven’t. In fact, they’re smaller than ever.
During the salad days of the housing boom, from about 2003 to 2007, lot sizes were on the rise as housing demand spurred development, particularly in the suburban rings of cities where there was more space to be had.
But since the crash, lot sizes for new construction, single-family homes have largely been trending downward, dropping nearly 1,000 square feet from 9,500 square feet in 2007. Lot sizes peaked at 10,000 square feet in the 1990s, according to U.S. Census Bureau data analyzed by the National Association of Home Builders.
The current average lot size of 8,500 square feet is just under one-fifth of an acre. To visualize it: 5.6 of these median lots would fit in a football field, the NAHB says.
Though the overall trend is down, there are regional differences: The Pacific Coast’s new construction lots are smallest, followed by Texas and its surrounding area and the Rocky Mountain region’s, though all are around one-sixth of an acre. Meanwhile, new construction in New England is more than half an acre, largely due to zoning regulations that keep population densities low, the NAHB says. The Midwest, most of the South and the Mid-Atlantic have lot sizes that match the median, with the exceptions being Texas and the southeast central region (Kentucky, Tennessee, Mississippi and Alabama).
Though lots are smaller, their prices are not. Demand for available lots for new construction is far outpacing supply, so median-sized lots are now worth a record-high price of $45,000, breaking the previous record price of $43,000 in 2006.
Again, there are regional differences, ranging from $120,000 for the median lot in New England (where the lot sizes are largest) to the Pacific Coast’s $58,200 and the Rocky Mountain region’s $58,000 per median-sized lot (where lots are the smallest). In the South, the median lot is $35,000 while the Midwest’s median lot ranges from $40,000 to $40,200. However, the Mid-Atlantic actually has the most expensive lots in the nation in terms of per acre costs, though the cost for the median lot size is actually mid-range at $80,000.
