Phoenix, Arizona backyards are shrinking. The Arcadia neighborhood in Phoenix, offers a prime example of a major trend in Valley real estate: houses in Phoenix are getting bigger and yards, smaller. Arcadia used to be a neighborhood of modest ranch homes on citrus-covered one-acre lots. As the neighborhood heated up and real estate prices skyrocketed, developers saw an opportunity: tear down those small homes and subdivide the big lots. Where one house stood, four would go up in its place. A similar dynamic is playing out in another Phoenix neighborhood, Butler Park. The large lots that boast horse rights and feature goats and other farm animals, are quickly being bought up and subdivided.

When we said houses are getting bigger, we meant really big

The real estate trend is not terribly surprising. What is surprising is how large the homes being built are. The newly constructed homes can run upwards of 5,000 square feet on a smaller lot, dwarfing the nearby original dwellings. The homes being built, fill the lots, leaving very little yard. Think giant patio homes.

According to Trulia, houses built since 2015 take up 25 percent of the lots on which they are built. In 1975, homes occupied just under fourteen percent of the lot. One reason for this is the  lots are, on average, about one-third smaller than they were years ago. But it’s also because the homes themselves are more than 15 percent bigger.

Show me the square footage! (The yard, not so much)

Realtor Kurt Nishimura says many of today’s families are no longer looking for the expanse of big yards. “People are willing to pay more for bigger homes but not bigger yards. Buyers tell me they don’t want to spend their weekends doing yard work since they are likely to be standing on a soccer field Saturday and Sunday or cheering their children on at a little league game. “

It is not just busy families driving the bigger houses on shrinking lots. Between 2014 and 2017, home prices saw a sizable jump. Such an increase spikes the cost of acquiring land, which then drives up the cost of building new homes. Builders face pressure to cut costs and their solution for recouping costs is to build larger homes on smaller lots.

Good-bye ranch-style, hello stairs

We are also seeing more two-story homes. Actually, make that three stories. Many of the new-builds have forgone the single-story ranch style, for two and increasingly, even three stories. A newer development in central Phoenix near 27th street and Camelback Road and another near Bethany Home Road feature three-level homes with virtually no yard. Nishimura thought all those flights of stairs might prove unattractive to potential buyers, but homes in both developments have sold well as buyers came, lured by the large amount of square footage.

Houses will continue to eat up yards

The Valley’s residential real estate market is not expected to maintain the rate of growth it saw in 2016 and 2017, but owners and investors can count on climbing prices, along with land values. That lends itself to a continuing trend of shrinking yards and growing houses.

At Landmark Title, we work with both residential realtors and commercial brokers, along with their clients, to provide escrow and title services. If you have questions or need assistance, please contact our office at (602) 768-2800 or visit our website.