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"It's key we're not willing to go broke to live in a house," said Jones.
Developers are responding by building smaller more affordable homes. Last year the average home peaked at 2,600 square feet; now it's 2,400.
"What we hear from them is 'I don't need a three-car garage. I don't need the playroom. I don't need the gym,'" said Shawn Evenhaim, California Home Builders.
And forget the big back yard with big water bill. What buyers want is compact, energy-efficient living.
A local complex that had smaller homes sold out in just two days. Another still under construction is half sold while a big development next door sits empty.
Marianne Cusato has designed what she calls the "New Economy Home": Four bedrooms and three bathrooms in only 1,600 square feet.
"A lot of people are coming to me and saying, 'Oh, the house is too big -- do you have a smaller one?" explains Cusato.
Jay Shafer does. He lives in just 100 square feet.
"Here in the kitchen I've got a bar sink and a double-burner stove," said Shafer.
He's taking his home on the road teaching others how to live and build small. And while his idea of small may be extreme, the concept is now very big.