The trend in residential construction is definitely toward "bigger."

In the past 30 years, the square footage of a typical single-family house has increased by 40 percent. And there are few indications of a reverse in that trend anytime soon.

Yet there are some buyers looking for smaller houses. Many empty nesters are looking to downsize from houses that often exceed 4,000 square feet to ones that are 2,000 square feet or smaller.

Another segment is the first-time buyer. Typically just starting out and cash-poor, the first-timer in the new-house market wants an affordable house that will launch him or her on the road to equity.

However, while both segments want smaller, they want to have the appearance of bigger.

"There are several things to keep in mind when you design a smaller house for empty nesters," said Mark Humphreys, a Dallas architect. "The most important is never skimp in your design of the kitchen, living room and master bedroom. Empty nesters are used to having these big, and if you make them smaller, they won't even look at the house.

"Put yourselves in the empty nesters' place," Humphreys said. "If they are downsizing from 4,000 square feet, they don't want a master bedroom closet that's half the size of what they are used to. They might even want a nicer kitchen than what they had--for example, better countertops such as granite or Corian instead of laminate or tile."

Builders need to be sensitive to the needs and prejudices of the buyers, and must always consider how both spouses will react to the floor plan, Humphreys said.

"Surveys show that women want two dining areas--a formal one and a breakfast room," he said. "You will need to guarantee both."

Because a lot of the product is designed by men, Humphreys believes that women often are left out of the equation.

"When a woman comes into a plan and can see the toilet from the living room, that's a negative," Humphreys said. "To a guy, that's a positive. He won't miss any part of the game."

It is easy to generalize about buyers in other ways. The problem with many builders, said Audrey Follmer, president of Follmer Design Associates in Austin, Tex., is that they tend to lump all buyer segments together instead of developing housing to fit different niches.

"Market research helps you develop your criteria," she said. "You need to know who you are selling to, and come up with designs that reflect the characteristics and needs of your buyers, especially those whose needs are not being met by other builders."

There are a lot of different niches in the under-2,000-square-foot market, Follmer said, as well as different stages in the lives of these buyers--whether young or older--to be accommodated.

"The first-time buyer, for example, is barely out of the apartment complex," Follmer said. "This buyer's expectations are very reality-based because of budget constraints. He or she doesn't have a lot of money to spend."

According to Follmer and Humphreys, one of the major challenges that designers and builders face in creating affordable housing is rising land costs.

"We have to design plans that fit smaller lots to reduce buyer costs," Follmer said. "And that requires a lot of creativity."

That's also how Jim McAleer sees it. McAleer, vice president of sales and marketing at Kevin Scarborough Homes in Gibbsboro, N.J., said he always is looking to develop single-family housing under 2,000 square feet for first-time buyers, but it isn't easy.

"People buying their first houses today think they should have all the bells and whistles, but have no idea how much these things cost," McAleer said. "What they should be buying is shelter, but instead they want to buy things like garage-door openers."

The unrealistic attitude of many first-time buyers is created when they visit other developments offering higher-priced houses, McAleer said.

"They'll go to Toll Brothers and see a model home for $350,000 with everything you ever wanted in a house, and then come over here and want to buy the same thing for $156,000," McAleer said. "The numbers just don't work that way."

What builders such as Kevin Scarborough do to keep prices down is make standard items into options, McAleer said.

"If you save $100 10 times, that cuts $1,000 from the price of the house," he said. "If you want to add these things later, when you have more money, then you can do it."

For instance, McAleer makes oak handrails optional.

"The delivery price of oak handrail is $32 a foot," he said. "After installation, it becomes a $750 to $900 item. When we explain it that way, buyers will say, 'We don't really need oak handrails,' and the price drops."

McAleer also stopped offering kitchen cabinet hardware as standard, suggesting that, at $3 each, "it would be better if the buyer went to Home Depot and made installing the hardware a Saturday project."

He eliminated six-panel Masonite doors as standard in favor of flush doors, and what was a "can't-live-without-it" item was only chosen as an option by 20 buyers out of 150.

"We're also told that everyone wants a two-car garage, but you should see all the houses with one-car garages when you offer two-car as an option," McAleer said.

Of course, there are things you cannot eliminate to save the buyer money.

"You can't build a house today with 1 1/2 baths," he said. "Everyone wants 2 1/2 baths, except for age-restricted buyers who want only two. But if I could cut out a bathroom, that's a saving of $7,000."

Dealing with empty nesters presents its own set of problems.

"They want more than what they have now to justify moving, but they don't know the cost of things," McAleer said. "They'll ask for a pocket door instead of a standard door, and can't imagine why a pocket door should cost $250 more."

If you cannot eliminate the big-ticket items and still want to make the house look big without increasing size and cost, the answer is to use the space you do have creatively.

Follmer likes to achieve a spacious feel in a smaller house by making the kitchen the center of the house and having everything else radiate from it.

Humphreys creates a sitting room in the master bedroom by adding a bay window, he said. "It creates the effect of adding space but without using any space at all," he said.

Such touches create "memory points"--things about the house that stand out in a buyer's memory when he or she is deciding on what to buy, or at least reducing the choices to a few.

Spaces can be opened up by moving the heating and air-conditioning unit high into the wall, said L. Brian Huehls, president of LBH Designs in Fort Mitchell, Ky. By doing so, you can place windows that bring light high into the space, which creates an effect that things are larger.

A wall of mirrors can do the same thing when space is limited, he said.

Huehls is a big advocate of making space flexible. One way to achieve that is by replacing walls with columns to create openness.

Another way to accommodate a lot in a little is by reconfiguring traditional spaces.

"You can build a computer niche on the second floor by oversizing the second-floor hallway and making the bedrooms smaller to obtain the space," Huehls said.

This is workable in both the empty-nester and first-time markets, because first-time buyers typically are single professionals and use bedrooms for storage or office space, Huehls said.

Empty nesters rarely object to downsizing secondary bedrooms, Humphreys added.

"They'll tell us that such downsizing is fine for them, because while they want these bedrooms for guests, they don't want the guests to get too comfortable and overstay their welcome," Humphreys said.