I think the 1.5 million price is a snapshot of the current market, with low availability of housing and most people unable or not knowing they can split the lot

I think the 1.5 million price is a snapshot of the current market, with low availability of housing and most people unable or not knowing they can split the lot. So houses are priced for their livability. If it starts to happen in mass, either the supply will depress prices or the existing houses with splitable lots will close to double in value to internalize that unrealized gain.