What you're observing isn't the output of a free market; for that, see towns built primarily up until about the 1930s; these are traditional, walkable towns, with a coherent downtowns and organic patterns of settlement.
Since then, zoning laws and land-use planning have drastically altered the common patterns of development and led to the rise of master-planned subdivisions that are all too common today.
If not for the artificial segregation of residential and commercial uses and for equally artificial restrictions on density of development, modern suburbs would likely be smaller satellite towns, each with its own coherent walkable core, instead of megatowns with purely residential sprawl extending great distances away from the only urban core permitted to be developed.