Lot Values Reach Record High Price
At the beginning of 2020, lot prices were up an unprecedented 18%, according to data from the Census Bureau’s Survey of Construction. The median lot price reached new heights at $53,000, and the National Association of Home Builders (NAHB) says this growth is in-line with other price hikes seen for building materials. After adjusting for inflation, NAHB says lot values are approaching prices seen during the 2005 and 2006 housing boom where lots sold at $43,000, equivalent to $55,000 today.
New England has been a division with the most expensive lots for decades and held on to the top position in 2020. Half of all single-family detached (SFD) spec homes started in New England in 2020 report lot values in excess of $120,000. New England is known for strict local zoning regulations that often require very low densities. Therefore, it is not surprising that typical SFD spec homes started in New England are built on some of the largest and most expensive lots in the nation.
The Pacific division has the smallest lots. However, median lot value reached $103,000 in 2020, the second most expensive value in the nation and a new nominal record for the division. As a result, Pacific division lots stand out for being most expensive in the nation in terms of per acre costs.
Similarly, the neighboring Mountain division recorded a strong rise in lot values and set a new record with half of the lots priced at or above $73,000. This made Mountain division SFD lots third most expensive in the US.
The West South Central Division, that includes Texas, posted the fastest lot value appreciation with the median rising 20% to $60,000. Just 8 years ago, half of the SFD lots were going for $30,000 or less – half of the current median.