I don't mind living in a small house (maybe not that small). But, the problem with most houses I see today, is that they're designed incredibly Ugly. I'm talking about the classic 2 car garage in front with an enormous concrete slab in-front (3 or 4 cars wide!!), and a little L shape next to it on a lot that's too small to accomodate such a layout and as a result, the neighbors house is 2 feet on each side.

Why can't they simply build a smaller footprint at the bottom, say half the size. make it two stories that way the neighbors house is further away and place the garage in the back somewhere and put a nice stone paved driveway (not too wide) leading to the back where the garage is.

The key to making these houses look nice whether it's small or large, is the ratio of height to width and length, as wells the features: such as a small tower, the slope of the roof, etc.