Little houses, big trend?

Bryce Prunty likes living small. In 2002 he bought a one-bedroom, 225-square-foot condominium, steps from the beach in Santa Monica, Calif. The unit is one of 14 small converted apartments making up a close-knit, landscaped complex on one of the most popular -- and expensive -- stretches of real estate in the U.S. He paid about $1,022 per square foot.

The 37-year-old tech-job recruiter loved the tiny pull-down dining room table, the mini-appliances, one closet -- in the entire unit -- and the miniature staircase leading up to the sleeping loft. No pantry in the unit, no counters, no clutter. Perfect.

Three years and a fiancee later, he moved up to a 600-square-foot condo in the same complex, a ballroom compared to the first one, but still a tight squeeze.

Nonetheless, "it's not a problem living in small spaces," Prunty says. "You get rid of the big couch and the clutter, and your life is simpler." He and his wife and baby daughter now occupy a 700-square foot house, but still own their tiny condo, which they rent out. "It's easy to get renters. People love it."