I currently have a 3BR/2.1BA 2000 sq ft house in Naperville, IL that was built in 1982. We bought it in 1999 for $260K. My two girls share a room and want to continue to do so. We just finished redoing the entire first floor. So now I have a barely midsized home with recent McMansions amenities. And of course now we have to move to the bridgewater area in NJ.
The thing is is that though we could afford to buy this house from ourselves, (or any other house in the $400K) we wouldn't be able to do the updating again. I don't want a bigger house, as it is we have two rooms that go completely unused. But man, I can't take the thought of going back to living in 1982 again.
I'm not sure that people necessarily think they need 3000+ sqft, but I think that that was all that was being built for the past decade or so. So people faced with the choice between a 1970s high ranch (grew up in one on long island) that hasn't been updated or a 3000 sqft brand new house, they went with the latter even though it was more house than they needed or could afford.
Heck, in 1999 our realtor tried to convince us we'd be fine with a $450K loan. Um no. Not on what we were making then. But it was hard buying a house with a 3/4 master bath that we barely had room to turn around in. (We have since knocked out a wall and made it a decent size with a soaking tub and a granite counter and floor, but no separate shower or dual sinks.)
So while I drool over those $900K+ homes, it's not the size, it's the well designed kitchens and the big windows, and the lack of linoleum, shag carpeting, and cultured marble.
The kitchen we just finished isn't very big, but it is pretty and very functional. I have big pot drawers, a corner lazy Susan cabinet, the cabs over the fridge go up to the ceiling and all the way out to the edge of the fridge! The stock pot and the turkey roasting pan and other bulky a rely used items live happily up there, blocked from view, yet easily accessible.
I'd love to find a spot to build this house:
Hudson House Plan - 2552
It's just under 2000 sqft. if you finish the bonus room. It doesn't have a formal living room or dining room- don't want either. It has a 3/4 bath and extra bedroom on the first floor - perfect for visiting grandparents that don't handle stairs well. It does have a 3 car garage o we would have space for the cars and a storage/workshop area. The bonus room would be our home office and the girls would continue to share the other upstairs bedroom.
But while these plans exist, you don't find many recently built homes under 2000 sqft like this in the wild.
I guess we'll rent for a while and hope that some new developments spring up where the builders realize that new and nice doesn't have to mean huge.