Lot Size Remains Low in 2020


The median lot size of a new single-family detached home sold in 2020 stands at 8,306 square feet, or just under one-fifth of an acre. This is slightly larger but statistically not different from the lowest on record median of 8,177 square feet set a year ago. The share of smaller lots, under 0.16 acres, is now record high at 39%.

The fact that lots remained in the record low territory during the pandemic-triggered suburban flight is somewhat unexpected. The 2021 lot size data – to be released next year – should provide more conclusive evidence on whether the pandemic-induced shifts in preferences towards more spacious living are wide-spread and reflected in larger new home lots.

The recent historically low median lot size largely reflects the shift in speculatively built (or spec) home building towards smaller lots. A decade ago, 27% of all sold single family detached homes were sitting on lots under 0.16 acres and additional 20% were occupying lots between 0.16 and 0.25 acres. Fast forward to 2020, these shares increased to 39% and 24%, respectively. As a matter of fact, the share of smaller lots (under 0.16 acres) has never been that high since the Census Bureau started tracking these series 20 years ago.

At the other end of the lot size distribution, the share of spec homes built on larger lots exceeding half an acre shrunk from 14% in 2010 to 9% in 2020. The share of lots measuring between a quarter and half an acre declined from 24% to 18% over the last 10 years. While nation’s production of spec homes shifts towards smaller lots, the regional differences in lot sizes persist. Looking at single-family detached spec homes started in 2020, the median lot size in New England is almost five times as large as the national median.

New England is known for strict local zoning regulations that often require very low densities. Therefore, it is not surprising that single-family detached spec homes started in New England are built on some of the largest lots in the nation, with half of the lots approaching or exceeding an acre.

The neighboring Mid Atlantic and more distant East South Central divisions are next on the list with the median lot occupying about a third of an acre. In the South, the West South Central division stands out for starting half of single-family detached spec homes on lots under 0.16 acres. This is significantly lower than the median lot sizes in the neighboring East South Central division where half of the lots exceed 0.3 acres.

The Pacific division where densities are high and developed land is scarce has the smallest lots, with half of the lots being under 0.14 acres. The bordering Mountain division also reports typical lots smaller than a national median, 0.16 acres. The analysis above is limited to single-family detached speculatively built homes. Custom homes built on owner’s land with either the owner or a builder acting as the general contractor do not involve the work of a professional land developer subdividing a property. Therefore, in case of custom homes, lots refer to owner’s land area rather than lots in conventional sense. Nevertheless, the SOC reports lot sizes for custom homes and shows that they tend to have larger lots. The median lot size for custom single-family detached homes started in 2020 is about one acre.

For this analysis, the median lot size is chosen over average since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot sizes and values on the public use SOC dataset making it difficult to calculate averages precisely, but medians (as the midpoint of a frequency distribution) remain unaffected by these procedures.

Tags: , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *