Shawn and I built a house in Maine together that was so much bigger than we expected and needed that it was ultimately one of the reasons we ended up selling it. While it was on the market, a frequent comment we heard was that it was "too small" which completely amazed us, particularly given that at the time, fuel prices were very high and it seemed an incredibly big house to us.
Since having that experience, we always consider size in our drafting, particularly since we have moved around and resale is something we now always take into consideration when building. We want to build small homes but also keep in mind that homes are a big investment/money sink for all of us. If you need or want to sell the home, it is nice to think that you could get your investment back out of it.
Has concern about resale value ever prevented you from building or buying a small house?
In talking with realtors over the last decade, we've noticed that rather than hearing about how big a house needs to be to be attractive to buyers, we're hearing realtors actually blow off the idea of a house being less marketable due to a smaller size - citing that people's tastes and needs are changing. Retirees don't need as much space and seem to be showing themselves more averse to taking on huge houses. Young couples, too, can fit this category. The size of families has grown smaller so that small houses can easily accommodate a family with children. Many people don't have children. This is a real sea change. Perhaps this trend holds more true in crowded urban areas where space is at a premium or in retirement areas where many buyers are not necessarily looking to take on a humongous house responsibility. But then again, we might also be seeing long term trends transition to smaller houses being seen as highly attractive for their own merits, rather than being seen as "too small" or "not big enough."