My HOA has had a minimum 1,500 sq ft requirement for any new construction for years. Most of the existing homes are well over 2000 sq. ft, however.
But like everywhere else, construction has boomed here in recent years, and the new homes are smaller. Most are between 15-1800 sq ft. And I have not seen one sell for less than $450 thousand.
I raised my family in a house that was 1800 square feet, but we could have managed with less space. To me, a small house would be apartment-sized. Currently, I share a 2BR apartment between 1100 and 1200 square feet, and it has plenty of space. If it were split into 3BR, I could have easily raised my family in a house this size. The single bedroom apartments here are between 800-900 square feet, enough room for a single person or a couple. In my golden years, I’d settle for a small, quaint cottage. :-)
But, as others here have pointed out to me, building a smaller-sized house might not be much less expensive than building a slightly larger one. So, I don’t know what the answer is.