THE MCMANSION IS dead! Long live the Jewel Box! Or so the housing industry tea leaves read to those looking beyond the next gated community. Whether driven by rising construction costs, shrinking lot sizes, increased urban infill, or aging baby boomers demanding high style in smaller footprints, the average size of a new home is holding steady at 2,400 square feet ... and is expected to pretty much stay there through the next decade.

Sure, you can still find houses resembling resorts in their footage and features, but for the masses, builders must think outside (and build inside) the box to squeeze every inch of function out of the average-size floor plan. “Using space efficiently is critically important to buyers and builders,” says Barry Glantz, president of Glantz and Associates Architects in St. Louis. “I've never had a client tell me to waste space.”

Maybe not, but there's still plenty of unused (or at least underused) space in most floor plans if you look closely enough ... or are willing to concede a shift in your buyer's lifestyle needs. From separation walls and long hallways that impede through-views to the sacred formal dining room that collects more dust than holiday memories, traditional floor plans—especially those at or under the average square footage—are ripe for retooling to achieve a happy union of efficiency, function, comfort, and value.

Understanding and applying proper spatial relationships, proportion, and other design truisms is second nature to residential architects, but typically less so for home builders. “As architects, we strive for space efficiency in every plan, no matter the footage,” says Gary Godden, president of Godden|Sudik Architects in Centennial, Colo. “Builders sometimes don't understand how multiuse spaces and proportion work as a function of square footage to create an efficient floor plan.”

Translation: Making an average-size or smaller house as efficient and functional as possible isn't complicated, but it does take some thought—and sometimes a leap of faith in the market. “We challenge some of our builders about whether their buyers really use the living room and how they use it,” says Jeffrey Lake, senior principal with Bassenian Lagoni Architects in Newport Beach, Calif. “Typically, it's underutilized and not how people live today, so we often downsize it into a parlor and offer it as more flexible-use space.”

Lake also advises builders to simplify if they want to make a smaller home live larger. “When you try to provide something for everyone instead of coming up with a targeted program, it cripples the floor plan,” he says. “If you're trying to put two bedrooms and all the common spaces down, that's just too many pieces in the puzzle, and it makes the house look smaller.”

Knowing and respecting how buyers truly use their homes, and even differences among generations or stages of life (think retirees versus young families), dictates how the floor plan comes together. “One of our first considerations is the buyer profile,” says Erin O'Leary Barker, design director/ associate in the Tampa, Fla., office of Des Moines, Iowa–based Bloodgood Sharp Buster Architects & Planners. “Younger buyers and families need quick and easy access to things, so we design more transitional spaces.” Older buyers, meanwhile, tend to accept and want more-defined areas, she says.

The “hit-and-run” lifestyles of today's younger buyers, says Barker, demands (and allows) architects and builders to reallocate underutilized areas of a traditional floor plan to create space that these buyers appreciate. “They want built-ins and places for the phone charger, coats, and keys before they get into defined spaces” such as bedrooms, she says. “They don't care how it looks, [as opposed to older buyers, who tend to like things tidier and shut from view,] as long as it gives them quick and easy access to their things.”

She also warns against trying to use or create niches for specific functions at the expense of not only a more open (and thus perceptually larger) floor plan, but also the kind of communal spaces that today's buyers crave. “For young families, the time spent together is few and far between, so ... they want a large gathering area,” says Barker, who suggests reallocating the footage taken by a computer niche in the hallway or a bedroom.

Though they may be somewhat trendy, creating transitional spaces such as drop-off zones just inside the door to the garage or foyers that glimpse living spaces or the outdoors from their sides as well as straight ahead (a trademark of Lake's floor plans) aren't trickery. “Space-efficient design isn't trying to make a 10-foot-by-12-foot room feel big,” says Glantz. “It's providing a better level of design that feels and lives better.”

Learn more about markets featured in this article: Des Moines, IA.