Downsizing from a big house has its upside, that's for sure: There's less square footage to heat and cool, fewer rooms to declutter and clean. The trick is to figure out a compact size that's just right, one where you use every inch but don't feel cramped. That was the puzzle Steve and Janet Dowd were trying to solve as they prepared to leave the rambling, suburban Laguna Hills, California, house where they had raised their two sons and move full-time to Steve's childhood home.

The 1940s cottage offered many pluses. Located about 300 feet from Newport Bay, the house featured a private courtyard and a living room with a charming, vaulted wood ceiling. On the minus side, it was a one-story, nondescript stucco house that totaled just 1, 225 square feet; their old house held 3, 800. The 8½-foot-wide kitchen would never suit serious cook Steve, and the dining room was barely bigger than a hallway, with no room for Janet's heirloom hutch. Plus, only one of three small bedrooms had a closet, and it was tiny.