With the average home size declining, owners are cleverly doing more with the square footage they have.

Years before house staging came into vogue as a sales tool, Howard Hoffman was helping sellers rearrange their furniture to maximize floor space and enhance a home’s beauty. Hoffman, GRI, SRES®, now owns Stage & $ell, a home staging and redesign company in Indianapolis.

Chances are he’ll have a lot more business in the years ahead from people needing to resize their lives. With baby boomers entering retirement, young adults delaying marriage, and the economy improving by fits and starts, Americans are starting to embrace the idea that less is more when it comes to their square footage. The average size of a new house decreased last year for the first time in nearly three decades. 

"Home buyers have been changing," says Fran Litton, a planner with Evans Group, an architectural firm in Orlando, Fla. "They still want the luxury and toys, but they’re putting them into a smaller space."

Although the average square footage of a new house is still double what it was in 1960, in the last year, it decreased slightly to 2,215 square feet from a high of 2,277 square feet in 2008, according to data from the U.S. Census Bureau. While the decrease doesn’t approach mid-20th century levels, it is the first drop in house size since the recession of the early 1980s.

Smaller houses can mean bigger challenges for real estate professionals. "Eighty percent of people appreciate only what they can see," says Hoffman, who also works as a sales associate with F.C. Tucker Co. in Indianapolis. "You have to make sure you’re showing them what you’ve got." That means making sure each room is easily identified. "Get rid of that desk and computer in the dining room," he says. "Make sure buyers can see it’s a dining room."

Hoffman also advises clients to remove rugs to show off hardwood floors and take pictures off the walls. "The less the eye has to distract it, the bigger a room feels," says Hoffman. "People buy what they see. If they can’t see the floors or the walls, they won’t buy the house."

Interior designer Roberta Lathrop agrees. She tells her clients with smaller kitchens to clear the counters. "You can’t have all the small appliances sitting on the counter," says Lathrop, who runs Designs by Roberta in Belmont, Mich. "It will start looking very cluttered very fast." 

Smaller houses require owners to rethink what they have and how they use things. "If you have a smaller house, maybe you don’t need half a dozen different pans," she explains. "Maybe a single flat griddle that you can put over a couple of burners will do."

One of the first tasks she assigns clients is to go through their stuff—ruthlessly. "We all have too much stuff," she says. "Get rid of it. If you’re attached to an item, or think maybe you’ll need it, put it in a box and store it somewhere for six months. Then go back through it. 

Have you used it? Have you even missed it? If not, donate it. Get it out of the house." That goes for clothes as well, she says.

Assess Furniture Size

Removing clutter is only one aspect of getting a smaller house ready to sell—or just living contentedly in it. Some big pieces of furniture, for example, won’t fit in modestly sized houses. 

"Take a look at the scale of your furniture, and don’t forget depth," Lathrop says. "Things can be a lot deeper than you realize, and all of a sudden, there’s no room to walk because that deep, comfy chair you love comes halfway out into the room."

Hoffman frequently asks sellers to remove furniture from rooms that feel overstuffed. "If you’ve got a huge china cabinet in a small dining room, it’s distracting," he says. "At least take the hutch off."

The color palette is very important in a smaller house, says Matthew McNicholas, an architect with MGLM Architects in Chicago. "Loud colors make a space feel smaller because they jump across the room at you," he says. "You want the walls and your furniture to recede." That doesn’t mean everything has to match. 

"Eliminate the high contrasts," he says. Lathrop says the same colors should move throughout the house. "Blend colors in more medium tones," she says.

McNicholas suggests installing a single type of flooring throughout the house. "Using the same color carpet or the same hardwood pulls your eye along from room to room, and maximizes your perception of space," he says.

Strategic lighting is another way to create the illusion of more space, the experts say. "Use corner uplighting and a room will feel much more open," Hoffman says. In fact, he adds, make sure the house is flooded with as much light as possible. That means trimming bushes or trees that block windows and tying back or removing heavy draperies that close in a room.

Another way to maximize space is to install as much covert storage as possible, such as pressing the furniture into double duty. Hoffman encourages clients with children to buy large wicker baskets that function as coffee tables and toy storage. 

When selling a smaller house, he tells clients to keep a couple of large laundry baskets handy. Then, if they have to leave in a hurry for a showing, they can pack the baskets and take the clutter with them to the car.

Room Mapping

Before purchasing any furniture or accessory, it’s critical to map out a room. "That way you won’t discover you can’t open the door to the storage compartment in your new end tables," Lathrop says. She recommends putting a small console in the entry or living room and buying bookcases with a cabinet section.

And then there’s the closets: Clean them out. Kay Courtney, CRS®, GRI, a broker in Grand Rapids, Mich., encourages her clients to remove half the items from their closets to get ready for showings. 

"If the closet is overstuffed, it says to a potential buyer, ‘There’s not enough storage space in this house.’ "And just to live comfortably, she recommends storing off-season clothing somewhere other than the closet, such as under the bed. And don’t forget the basement. 

Courtney says adding a few inexpensive cabinets, even to unfinished basements, can create lots more storage for off-season clothes and infrequently used items from the kitchen.

Hoffman reminds his sellers not to forget the outside of a house. High bushes, overgrown trees, lots of outdoor furniture, and other yard paraphernalia can make a house look smaller. "People want the ideal," he says. "If you don’t have it, create it." Installing flower boxes or hanging a swing on the front porch adds a touch of charm and coziness to a smaller house.

For the more adventurous, McNicholas offers a few easy structural changes that give the illusion of more space. Higher ceilings make a room feel larger. In an existing house, building out a small soffit along the edge of the ceiling, creating a tray effect, tricks the eye into thinking the center of the room is higher than the edges. 

"It feels bigger," McNicholas says. And lowering the ceiling in a hallway makes the rooms off it feel bigger and grander. "Even a few inches makes a big difference when you walk into the room and get the sense of that extra height," he says.

Buyers also may need some extra coaching when looking at smaller houses. "You have to show them how they can repurpose rooms, like splitting that fourth bedroom they don’t need to accommodate a master bathroom and closet," Hoffman says. It’s not uncommon for him to bring along an architect or remodeling expert to help potential buyers see the possibilities. 

"People want the perfect house immediately," he says. "When they’re buying a smaller house, you have to prep them. Let them know they may have to make a few changes, but that it’s not scary or overly difficult."

He also likes to highlight the benefits of smaller houses. "They tend to be closer to the city, which means easy access to public transportation," Hoffman says. "And they’re often single floor, too, which can be useful in so many ways, from cleaning to just getting around."

Another benefit of a modestly sized house is that it forces families to spend time together, says McNicholas. "When everyone has a room to be entertained in, you’re not interacting much," he says. "When you have a smaller space, it puts you together. You can rediscover your family."

But buyers do have to think differently. "It takes more thought and planning to live in a smaller space," Lathrop says. "You have to think about what you need, how you can be more efficient, and where can you add storage." The key is not to be afraid and to embrace the benefits, she says. "It’s much easier to take care of, and your electric bill will be lower. What’s not to love?"

Storage Smarts

If space is at a premium, home owners need storage that’s both functional and beautiful. These days, it’s not hard to find. "They’re coming out with wonderful furniture with storage built right in," says interior designer Roberta Lathrop. "There are storage ottomans, end tables—even chairs with places to store your remote."

When looking for pieces that can double as hidden storage space, pick designs that don’t skimp on the details. 

"Traditional details like crown molding or base moldings make a room feel grander," says Matthew McNicholas, an architect with MGLM Architects in Chicago. The same can be applied to furniture. "A room is nicer when the details in it are nice," he says. "The trend in bigger houses is to use less expensive materials because you need so much of it." In a smaller space, it’s easier to upgrade the materials for a more elegant feel.

Don’t forget "found" storage, or space that isn’t obvious. Home owners can install bed risers, which safely lift a bed five or six inches to create storage space underneath. 

Another example: spice risers for kitchen cupboards. The bleacher-like devices create three times the space of a single cabinet. Many companies now offer heavy-duty shelving that attaches to the ceiling in garages, basements, and laundry rooms.

Stashed Away

Small closets call for big ideas when it comes to maximizing space. Some are simple and relatively inexpensive, such as adding a second hanging rod or storing off-season clothes under the bed. Experts suggest adding a shelf or two above the rods, hooks on the back of doors and bedside tables with lots of drawers. Decorative hooks on the walls can be used for purses or belts and ties.

Of course, the simplest way to create more closet space is to reduce what’s going into it. "When it comes to closets, we just don’t realize how much we really have," says interior designer Roberta Latham. She suggests trying on each piece of clothing to see what fits and what still works. 

If it doesn’t fit, donate it. If something needs mending or is stained—and has been that way more than six months—get rid of it.

"Do an inventory and determine how much space you need for tops, bottoms, shoes, and purses," she says. "Then identify your living habits. Do you like to reach in and grab, or do you prefer everything neatly folded away?" That can help determine what type of storage you need.

Target the closet doors. Replacing a sliding closet door with a regular double door can add six inches of hanging space. Changing to bi-fold or pocket doors can add even more space, Lathrop says.

Architect Matthew McNicholas says to look for empty or dead space to add built-in bookshelves or cabinets.

Other than the bedroom, the kitchen is probably the room most in need of storage space. "There are so many new, more efficient ways of storing things," Lathrop says. "There are rollouts [in the cabinets], spice racks, all sorts of things." 

In terms of design, Lathrop says the trend is toward "a European look" that has more efficient storage than the traditional American cabinets. "The kitchen is one of the main meeting areas in a house," she says. "You should think about how you’re going to use the space and what you need to store."

Keeping Order

Coat Rack A line of decorative hooks hung on the wall can neatly store coats, purses, and scarves. Many sets come with a shelf on top, creating even more space.

Trundle Drawers For storing off-season clothes, large or odd-sized toys, or anything else that will fit under the bed or under a table. Be sure to look for rolling casters.

Trunks Trunks made of metal, wicker, or canvas can function as coffee tables or end tables with loads of storage inside.

Corner Cabinets These shelves slide into corners to turn dead space into storage. They come in a variety of heights, widths, and finishes, and many have doors to hide what’s inside. Try open, hanging corner shelves for a more modern look.