Definitely look into modular/prefab. They are well-built (my hubby is an architect and verifies they are stronger/better built as does my remodeling contractor). I currently live in an older one and have to agree. These days there are all sort s of styles/prices to choose from. The great thing is, you save a little money and LOADS of time and get a great product. Put in your basement foundation to be finished at a later time. Check out modular companies in your area.

Good luck!

http://www.coastalliving.com/coastal/homes/ideahouses/cottage2002/cottage2002.html

Cruise around on this link. I love this home. It can be built in phases and has a large, open living/kitchen area.

I knew someone at work who built a modular home for her mother. She said the modular home was nicer than her's.

I just happened to notice that there is a MODULAR HOME forum on gardenweb. Not to put you off the smaller homes forum as most of us enjoy living in smaller houses and are satisfied with them.

Good luck.

There also are some pre-fab plans which permit the connection of two of the units back-to-back to create a larger home. Might want to site and plan for that. Check out the fablist.

Here is a link that might be useful: fablist

If you are in part of the world where a full basement is necessary AND can find a sloping site, a daylight walk out basement is a great economiser. Build a 26 X32 one story with the use of a full basement, they can be delightful and cost little more than the already needed basement.

Today, it is common to see many small homes being built for families nationwide.In order to minimize excess building materials during the home construction process, our designers have kept efficient use of space in mind. This allows our small house plans to conserve materials, while maximizing living space.

I designed my house to have flexible use and energy efficient.
It has 1300 ft down and 800 up. My wife and I live down and the up is only used with company. The HVAC are two separate units with a door at the top of the stairs. Here in S Texas when temps get to upper 90s regularly, with abundant insulation over the second floor, upstairs has never seen over upper 80s, and that is the attic to my first floor. Wouldn't you like an attic that never gets super hot? Bottom line, highest electric bill has been $120.
For those people who have youngsters it's just a two story house. When you become empty nesters, you shut down the up and enjoy the savings. No need to sell and find a smaller home. You still get good appreciation from a standard sized house...in this case a 3 bed, 3.5 bath setup.

Here is a link that might be useful: