I think the future is technology caves. You can get the advantages of a large home in a small space if you make clever use of technology and you design the space to fit the way modern families live.

For privacy in a small home, you'd want to soundproof the bedrooms and bathrooms. Much of the benefit of a big house is being out of hearing range of other people. Soundproofing probably adds 30% to the cost of the room, but it saves money if it allows you to make the home half as big and just as livable.

You'd want to locate these technology caves in towers or wherever you can find dramatic views. You won't feel claustrophobic if you have wall-sized views of the great outdoors. Add a large flat screen TVs to a bedroom wall, doubling as a computer monitor, and you'll have a technology cave that no kid will want to leave. With the right equipment, you'll be able to stream movies, play video games, Skype, text, and access the Internet, all with one big screen and a wireless keyboard. Put surround sound speakers in the walls, and a microphone in the keyboard, and you have it all. I'd also design the sound system to automatically mute (as a preference option) whenever the door is opened, so the sound doesn't blast into the other spaces.

The technology cave would have an oversized kitchen at its core, with a center island that seats six or more. There was a time when you needed a formal dining room for entertaining. But that level of formality is heading toward extinction. So delete the dining room and make the kitchen oversized. Everyone loves being in the kitchen with the action and the food.

Just off the kitchen, and open to it, would be what I'll call a general utility room. It's a combination of a home theater, a living room, and a family room. Normally you wouldn't see a high end home theater system in a small home, but for $25K or so, wrapped into the mortgage, you could double the enjoyment your family gets from the common space.

Every home in the future should have some sort of office workstation setup, perhaps with two computer workstations. You could design the office to double as a guest room and a second gathering space. I can imagine the desk area being located on a raised floor a few feet above the rest of the room so you can store a bed beneath it. When guests come, just wheel it out. Office hours are generally different from sleeping hours, so one space could handle most needs.

Garages might be unnecessary in the future, except for storage. If you design a city from scratch, public transportation will get the job done.

In the past, the square footage of a home was probably the single biggest factor in determining its level of comfort and livability. Today, technology and a growing trend toward informality make the size of the home less important. You can get to the same level of livability at lower cost by putting your money into room design, sound proofing, and technology. My best guess is that a technology cave could achieve the same level of livability as a McMansion, at a quarter of the price.

I predict that someday you'll see a technology company such as Apple or Google get into the residential technology cave business. The traditional residential construction industry will never embrace smaller homes with better technology. The change will have to come from another industry.