Lot sizes have been shrinking for decades and are now smaller than ever — especially in California.

In 2020, the average national lot size hit a record low of 13,896 square feet. In 1978, average national lot sizes were 30% larger at 18,760 square feet, according to a 2022 Angi report.

California homeowners live on some of the smallest lots in the nation. They also pay more per square footage than any other state, on average — besides Hawaii, where each square foot of property costs $110.86.

The average California lot size is 8,327 square feet. The average price California homebuyers pay per square foot is $85.60.

Only one other state ranked lower on its average lot size. Nevada’s is 7,405 square feet, about 12% smaller than California.

On the other side of the spectrum, homeowners in Vermont, the state with the largest lots on average, pay only $5.95 per square foot and enjoy an average lot size of 78,408 square feet — 162% larger than the median California lot.

In general, rural Northeastern regions have the largest lots in the nation. There, minimum lot sizes prevent builders from subdividing land into small, dense housing. Those states also have older-than-average homes, which tend to have larger lots.

Lots in some California metros cost less per square foot than the state’s average of $85.60, including:

  • Bakersfield, which costs $38.87 per square foot;
  • Fresno, which costs $46.59 per square foot;
  • Riverside, which costs $68.87 per square foot;
  • Sacramento, which costs $74.30 per square foot; and
  • Stockton, which costs $85.59 per square foot.

But some California metros ranked higher than the state’s average, including:

In fact, Los Angeles, San Francisco and San Jose are the most expensive three metros in the U.S., as illustrated on Angi’s infographic.

San Diego was the California metro with the largest median lot size, at 9,971 square feet. San Francisco’s median lot size was the smallest, at 6,098 square feet.

Related article:

California’s suburban homebuyers are moths to a flame — and paying for the privilege

Why the variation in lot sizes

The variation in lot sizes across the U.S. is a result of several factors, including:

  • high levels of demand;
  • limited supply of houses;
  • a shift towards urban living; and
  • zoning laws which restrict the construction of new housing.

Cities with urban growth boundaries which limit development beyond city borders have small, expensive lots. Zoning prevents development outside city borders, thus limiting the supply of already in-demand housing.

The shift from rural and suburban life to urban life also plays a factor. Since 1950, the share of the U.S. population living in cities has swelled from 65% to about 83% today, according to the Angi report.

Related article:

The pandemic response is over, and urban housing is back

As more Californians choose to live in large cities, where jobs and amenities are plentiful, they also choose to give up a piece of the American Dream: a large suburban home, expansive front- and backyard and the classic white picket fence.

The shift to urban living leads to increased density, thus smaller lots.

Laws allowing for greater density have been slow to take hold here in California, mainly due to vocal not-in-my-backyard (NIMBY) advocates who don’t want to see their neighborhood character jeopardized with an influx of residents. [See RPI e-book Real Estate Economics, Chapter 21.3]

These barriers to density are in fact barriers to economic growth and a more stable housing market. When NIMBYs fight for zoning status quo, real estate professionals are pit against one another for a handful of listings in a given neighborhood, even when demand is high.

The solution to California’s housing shortage is simple: build more housing.

This goal only becomes achievable when local jurisdictions allow greater density in desirable areas that are:

  • close to jobs; and
  • near public transit, to relieve parking requirements which take up available land.

Legislative efforts to make this a reality are underway, but it’s up to individual real estate professionals to be vocal at the local level by attending city council meetings in their service area.

To receive updates on California’s shifting housing market and legislation, subscribe to firsttuesday’s agent-focused newsletter: Quilix.

Related article:

California’s low housing inventory boosts homeowner support for ADUs

Want to learn more about California’s housing shortage? Click the image below to download the RPI book cited in this article.