[DontchaKnowit]

If this is true, it is so insanely contrary to the opinion of literally every single person I have ever met. Everyone wants a yard. Most people want a sizeable yard for their dogs or kids, or to drink beer and have campfires.

I grew up in rural midwest USA. maybe opinions are different elsewhere, but your comment is a bit baffling. Ive never in my life heard someone say "that house would be perfect if it just came with less land"

[Retric]

I know several people who decided to get smaller yards or were happy to move into apartment complexes without them.

We both are dealing with biased samples. A childhood friend who is very into the outdoors moved to a rural area and got 14 acres, everyone else moved to an apartment or a house with under an acre. This stuff shows up on migration patterns, and well there’s a reason the Rural Midwest USA is a small percentage of the US population.

So, I agree many people do want a large yard, but revealed preferences suggest it’s a minority opinion.

[qazxcvbnm]

Revealed preferences are only as revealing as the market is competitive. In monopolies, is it not revealed that the populace prefers to be price-gouged? In a market as regulated as housing and with deep ties to policy (and industrial structures that I have heard about which I do not understand), it's difficult to not be sceptical of revealed preferences as a sole convincing explanation.

[Retric]

What you’re describing may impact housing developments etc, but I don’t think many markets are more competitive than used homes.

Despite its rarity a 3 acre lot is rarely worth 3x what a 1 acre lot would be, unless it can be subdivided.