When Joanne and Bruce Montgomery built a vacation home on Washington’s Whidbey Island, they thought big: sweeping views of the Puget Sound, mahogany-framed windows, heated Brazilian teak floors and other high-end amenities. Their budget was an ample $875,000.
The only thing they skimped on was size. The house measures 1,888 square feet—downright tiny in the luxury real-estate market.
“I think smaller has many more advantages than larger,” said Ms. Montgomery. “You want to have a place that is beautiful but not overbearing on your life, especially if you have multiple homes.” The couple—he is a pulmonologist and pharmaceutical entrepreneur and she is a retired nurse—also are finishing construction on a 4,000-square-foot primary residence in Medina, Wash., perhaps best known as the site of Microsoft MSFT +1.05% founder Bill Gates’s 66,000-square-foot mansion. The Montgomerys’ $800-per-square-foot budget, including landscaping, could buy a house at least 50% larger in the neighborhood, said Lisa Whittaker, a local broker for Coldwell Banker Bain.
Nothing but the size was skimped on by the owners and architect for this 1,888-square-foot luxury home on Whidbey Island in Washington. Wiqan Ang for The Wall Street Journal
Luxury in American homes has long been defined by size—a newly built home grew from an average of 1,660 square feet in 1973 to over 2,500 square feet today, according to the U.S. Census Bureau. Now, top-end real-estate brokers say more clients want to shave off square footage and give priority to luxe finishes, green building and smart design. Of course, some high-end homeowners define “scaling back” as going from 14,000 square feet to 10,000 square feet. But others, like the Montgomerys, find that 2,000 square feet, well designed, can feel like an indulgence of space.
Last year, Heidi Brunet, a mortgage banker in the Peninsula area of Dallas, built a 2,085-square-foot home with soy-based, energy-efficient insulation, stained concrete floors and a $48,000 LED lighting system. Though she economized on size, Ms. Brunet said her dream house wasn’t cheap: It has an $8,000 Miele refrigerator, a $57,000 plunge pool and $35,000 in landscaping.
“For what I spent, I could have bought a McMansion for sure,” said Ms. Brunet, who declined to specify the total budget for her house. “I wanted the house to be everything I needed it to be and nothing more.” She splurged—in terms of both space and dollars—on a 1,000-square-foot deck, the pool and the yard because, she said, “the outdoor space is really where I spend my time.”
Ms. Brunet’s instinct to design her house around the way she lives is the cornerstone of a design movement perhaps best summed up in “The Not So Big House,” a series of best-selling books by Raleigh, N.C.-based architect Sarah Susanka.
After more than a decade of writing about thoughtful use of space, in 2012 Ms. Susanka built her ideas into a “Not So Big Showhouse” in Libertyville, Ill. During the six months when the 2,450-square-foot house was open to the public, it attracted 8,000 visitors. It sold for $750,000. Ms. Susanka also recently released a “Not So Big Bungalow” kit with basic building components for a 1,600-square-foot bungalow. Another key player in size-consciousness is the Montgomerys’ architect, Ross Chapin, who typically designs homes between 1,000 and 2,400 square feet, but has built houses as small as 350 square feet.
“I jettison the formal dining room, formal living room and hallways that don’t need to be there,” said Mr. Chapin, who is based in Langley, Wash.
From 1997 to 2007, Mr. Chapin designed six Puget Sound, Wash., neighborhoods in which houses ranged from 700 to 2,500 square feet, and sold for between $200,000 and $890,000, said Linda Pruitt, owner of the Cottage Co., which built the projects. His site plans for 15 similar neighborhoods have also been built or are under construction in Massachusetts, Michigan, Indiana and elsewhere, he said.
Smaller luxury homes are gaining traction even in big-house country, such as Atlanta and Dallas. Real-estate broker Mikel Muffley, of Muffley & Assoc., custom builds small homes in Atlanta designed by some top local architects. Most of the houses range from 2,200 to 3,200 square feet, and cost between $450,000 to $1.8 million, Mr. Muffley said.
“I’ve sold a lot of massive houses in my 20 years. My clients typically tell me when they go to sell, ‘We will never need that much space again,’ ” Mr. Muffley said. In Dallas, Robbie Briggs, chief executive of Briggs Freeman Sotheby’s International Realty, did a brisk business a decade ago selling 12,000-square-foot houses, he said.
“Today, someone who wants a big family house is probably happy at 7,500 square feet,” Mr. Briggs said. Current buyers value outdoor amenities, such as fountains and kitchens, rather former status symbols like cavernous media rooms, he said.
Some regions are attempting to regulate home size with new ordinances. In 2006, city planners in Austin, Texas, created what is known as “McMansion ordinance,” which limits floor area to 40% of lot size. As of 2010 in Marin County, Calif., any plans to double an existing home size to more than 3,000 square feet have to undergo a design review. To avoid this step, some architects are designing smaller homes, the planning division said.
In Los Angeles, a 2005 ordinance allowed a number of home lots in the city to be subdivided. Kevin and Hardy Wronske of Heyday Partnership have built, or are in the process of building, 58 homes in Los Angeles designed for these smaller lots. In December, they went into contract at $1.635 million for a 2,000-square-foot home they built on a 6,000-square-foot lot in Venice, Calif.—one of three similarly sized homes being built on same lot.
The houses have no yards, but do have roof decks with views—on a clear day—of the ocean and mountains. Twelve-foot ceilings, Bosch kitchen appliances and Caesarstone quartz countertops will provide luxury. Solar power and LEED platinum certification, a top green-building standard, burnish the properties’ environment-friendly credentials, said Kevin Wronske.
Jason and Monica Schroeder of Libertyville, Ill., both school administrators, went house hunting two years ago, and stumbled on a property they considered an upgrade from their previous 3,000-square-foot home in a nearby town. The new house: a 1,680-square-footer with an unfinished basement, which they bought for $551,000, a budget that could have gotten them nearly twice the size in the area.
“Our new home doesn’t feel smaller,” said Mr. Schroeder, 39. “There’s no wasted space. All the spaces are usable and you live in all of them.” The Schroeders’ house is on School Street, where Ms. Susanka built her show house.
The developer, John McLinden of StreetScape Development in Libertyville, is in the early stages of developing 27 customizable homes in Skokie, Ill., and 24 houses in Steamboat Springs, Colo., which will start at $700,000. Most homes will be around 1,800 to 3,500 square feet, and lots will be no bigger than 30 feet across, he said.
Mr. Schroeder loves the craftsmanship and layout of his new house, he said. But he also values certain intangibles, such as being close enough to neighbors that they can chat from porch-to-porch and watching local kids play in their front yards. “It makes you feel like you’re connected to something bigger than yourself,” Mr. Schroeder said.
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