So there is a house for sale down the street in our dream neighborhood. It is (gasp!) 600-700 square feet and a 1 bedroom 1 bath (with an enclosed porch that was used by the previous renters as a very small bedroom). I keep coming back to it, but DH is a bit skeptical.

I always knew that we weren't going to be able to afford a 4 bedroom 2 bath like my parents in pricey so cal. But we always expected to do a 3 bedroom 2 bath. In the last year we have been seriously looking we have come to terms with the idea that we are likely looking at a 2 bedroom one bath 800-900 square feet. The house we almost bid on fit this description, but it also had a large back yard. None of the ones we have looked at have garages.

This house has no garage, very tiny yard with no drive way or room for parking, 600+ square feet.

The pros are it is very well laid out with a seperate small dining area (or home office/piano room), a seperate and sizable laundry room, in the downtown area, but a few blocks outside so parking on the street is ok (I have driven by at various times of day and night and parking is plentiful), and walking distance (2 blocks) to the beach. The house has been completely redone and looks to be in great shape with a nice kitchen. We would need to install a dishwasher, and buy appliances, but other than that it is move in.

The house has been on the market for two months. We think they would take below list and this would be by far the most affordable (if not the only affordable one) in our market by 50-80k.

We would have to declutter and get rid of some furniture, but the cost with taxes and insurance would come out to what we pay now (and our rent goes up every year and is starting to get ridiculous at $1825 a month).

I think we could have a kid (maybe even two) and while it would be a tight squeeze we could make it work for 3 to 4 years, maybe more if we needed to. The house is also super rentable, and we could likley rent it for close to the carrying costs, so even if interest rates went up and prices went down or the house was hard to sell it would let us own a rental property.

Am I crazy for thinking this might work? I just question whether holding out for a 800 or 900 square foot house that probably also won't have a garage and may not be as well laid out or in the neigherborhood we want is worth it, especially if it costs us more tens of thousand of dollars more.

Has anyone intentionally downsized to a home smaller than 1000 sq feet? We have about 900 sq ft now and never use our second bathroom, our dining room stores a table that is covered in dust, and we don't use our home office for anything other than storing furniture we don't use. I am trying to decide if this is an opportunity others don't see the value in, or just insane.