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Personally, I enjoy a large house, but I can understand that not everybody wants one. The house I grew up in was around 6,000 sq. ft. and the vast majority of space was never used. After that, we moved into a 2,200 sq. ft apartment in Manhattan, and we *still* had space that was just for show. Now my mom lives in a ~3,000 sq. ft house in Florida, and amazingly, she has found a layout that actually gets utilized!
I think the amount of utilization really depends on layout, and not space. I am currently renting a 1100 sq. ft apartment, and the office doesn't really get used. So, it's not about how small/large the house is, but rather about how functional the layout can be with one's lifestyle. I'm sure I could live comfortably in, and fully utilize a large home, but it would have to be partitioned to suit my interests.
My husband and I live in a house that's right around 2000 sf and has a .26 acre yard. There are rooms that aren't used much right now but by the time we have a kiddle or two (we're looking at adoption), they will be.
In Washington state, many of my friends were living in houses that were smaller than ours with several kids and not much room. My growing up family lived in a bigger house than what I currently own, probably around 3300 sf, and I was the only child. So I guess I see us as being happily in the middle.
To me, floorplan/storage area was most important in a house, followed closely by lot size and usability. After that, it was how many sf a house had. We saw houses in our search that were larger than our current home but had a tiny kitchen and a completely wooded yard, where we wouldn't be able to set up a volleyball net or a play structure for our kids. That just didn't "fit" what we felt was practical for our family.
Many of our friends here live in larger houses than we do, and I feel like if they have the income and family needs to support that, they should feel free. (I'm not talking about McMansions, by the way, just "nicer" larger houses than what my husband and I currently own) I guess I just feel incredibly blessed to live in a relatively new house with a great yard, a solid roof over my head and enough and to spare.
Not everyone who has a larger home is living paycheck to paycheck or has space they don't use. Our home is over 4000 sq ft, and it's all usable space - no formals or rooms for looks. As income goes up, some expenses do not go up proportionately. If your income quadruples, you don't necessarily spend 4 times more on food or clothes or utilities. As our income has increased over the years, we've had much more disposable income. Therefore, we can afford a house that we can fill with family and friends at any time. We have plenty of room for the kids to play. Could we squeeze into less space? Of course we could. And we could save in lots of other areas as well. We could eat out less or go on fewer vacations or not have a dog. But as long as we are happy with the choices we've made, don't have any financial problems, and are set for for retirement, I don't see any reason to have a smaller house for the sake of having one.
One of the legitimate needs for more space is the increase in the self employed and telecommuters.
This is one of the reasons that we bought the size house that we did.
I haven't seen any data on the topic, but I would think from an environmental stand point (smaller foot print theory) it's better to have a slightly larger home that allows you to work from home, thus keeping your car off the road. And of course if you work from home that is one less cubicle in a building that needs to be heated and cooled.
I love the idea of those less than 500 sq ft homes like Tumbleweed that NRG posted. But my sanity could only pull that off if I lived by myself. Otherwise I know that I would not have the space to escape occassionally. However, I do like the idea of those for a vacation home.
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