Lot Values Set New Records


Lot values for single-family detached housing starts in 2021 increased across the nation, with the national value and six out of nine Census division values setting new records. U.S. median lot price now stands at $55,000, according to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC) data. In New England and Pacific, lot values surged 67% and 39%, respectively, and reached new historic highs, even after adjustments for inflation. As a result, half of single family detached homes started in New England were built on lots valued at or more than $200,000. Though these new lot values seem sky high, these are consistent with record lot shortages, recent significant building material price hikes and unprecedented supply challenges that have been constraining the pandemic-fueled housing boom in 2021. When adjusted for inflation, lot values are now close to the record levels of the housing boom of 2005-2006 when half of lots were valued over $43,000, which is equivalent to about $57,800 when converted into inflation-adjusted 2021 dollars. At the same time, home building shifted towards smaller lots, resulting in record high prices per acre. New England has been a division with the most expensive lots for decades but ended up in a league of its own in 2021 when, as noted above, its median lot price surged 67% and reached $200,000, almost quadrupling the national median. This means that half of all single-family detached (SFD) spec homes started in New England in 2021 were built on lots valued at or in excess of $200,000. New England is known for strict local zoning regulations that often require very low densities. As a matter of fact, the median lot size for single-family detached spec homes started in New England in 2021 was four times the national median. Therefore, it is not surprising that typical SFD spec homes in New England are built on some of the most expensive lots in the nation. The Pacific division has the smallest lots. However, median lot value reached $143,000 in 2021, the second most expensive value in the nation and a new record for the division, even after adjusting for inflation. As a result, Pacific division lots stand out for being most expensive in the nation in terms of per acre costs. Similarly, the Middle Atlantic division recorded a strong rise in lot values and set a new record with half of lots priced at or above $90,000. This made the Middle Atlantic division SFD lots third most expensive in the US. The Mountain division followed with a median lot price of $75,000, a new divisional record. Two neighboring divisions in the South – South Atlantic and East South Central – also posted divisional records. Nevertheless, these divisions remain home to some of the least expensive lots valued well below than the national median. Half of SFD spec homes started in these divisions in 2021 have lot values of $42,000 or less. The East South Central Division records the second largest lots in the nation, thus defining some of the most economical lots, as well as lowest per acre costs in the US. The West South Central, which includes Texas, and East North Central divisions were the only two divisions that posted moderate declines in the median lot values. In case of the West South Central Division, it was a welcome change after recording some of the fastest lot value appreciation in recent years. Less than a decade ago, half of SFD lots here were going for $30,000 or less, almost half of the current median of $55,000. For this analysis, median lot values were chosen over averages since averages tend to be heavily influenced by extreme outliers. In addition, the Census Bureau often masks extreme lot values on the public use SOC dataset making it difficult to calculate averages precisely but medians remain unaffected by these procedures. This analysis is limited to single-family speculatively-built homes by year started and with reported sales prices. For custom homes built on owner’s land with either the owner or a builder acting as the general contractor, the corresponding land values are not reported in the SOC. Consequently, custom homes are excluded from the analysis. Related ‹ Median Price of a New Age-Restricted Home Up to $472,000Tags: 2021 starts, home building, lot prices, lot shortage, single-family