I moved back to the area in 2012 and had a hard time finding a house in a short close period for the home I was selling in NC.
Three years forward and it's full out insanity out there. New builds everywhere and they are building those large 4000 sq foot heat boxes again. Last bust you couldn't give one of those things away, they were selling for less than the one story ranches half their size.
The thing about the way they build out here too. The houses really, truly suck. Bad. (said in my best Obamaphone lady voice).
They are horrible. On really small lots, no storage--they feel like large, crappily built apartments. So, no one really, really has any feeling of permanence or "home" feeling to the house. You hate your neighbors because, well, living right on top of just about anyone is not a recipe for tranquility. Stuff starts falling apart after a year or two. So, I understand how many, less disciplined people, just look at it and say, "Eh, not worth it, here are the keys".
I bought in 2014. Small ranch in a newer far NW subdivision. I am satisfied with the “build” quality but someone needs to tell them that the small ranches are going to be used by retired folk that have four seasons of clothing that they want to keep when they travel to relatives and the closets need to hold something. The prices are still moderate but not the giant bargains of 2007-2010. I don’t much care if the prices come back to the 2003 - 2007 range because I am going to be in this until I die or go to the “home” in 20 years — I didn’t buy with resale in mind.
Like you say, you can buy a 2800 two story for less than a 2000 foot ranch. We seniors don’t want to pay utilities on those bigger boxes but we do want space.
I think the lots are platted so small because half the houses have pools and they will all need the wall enclosures due to that. One neighbor from California use their garage for evening parties as is more a custom out there but we hate it. It is only one house on the block that does this however. A lot of homes were bought up by hedge funds looking to park money — there are lots of rental houses in good shape in Phoenix where people bought when the market went in the toilet and they rent them until they retire and come out here.
I have one younger couple that bought a three car garage model like mine, had the builder put a solid wall and window where the garage door would be and they have a 240 SF walk in closet.