As a side point, I would like to see a return to smaller houses and more density.

Maybe this is already starting to happen in a small gradual way. Notice that in KB’s new prices, the larger homes aren’t that much more $ than the smaller ones: 34% more s.f. only costs 13% more $.

Actually, I would be willing to pay more for a modest sized single story than a behemoth 2 story with behemoth electric bills in the summer. That extra s.f. is more of a liability than an asset. In addition to utility bills, eventually everything in a house will wear out and the bigger houses just have more stuff that needs to be maintained, repainted, and eventually replaced. And for what? I’d like it if new tracts could be zoned and designed so that the 3600 s.f. house could be built as duplex, with two 1800 s.f. townhomes on each 7000 s.f. lot, sharing the yard. They used to do that a lot back east and I think it’s great. I think there would be a market for that in California, in areas close to jobs especially. It’s better than a typical condo but more practical than an SFR. I often wonder what is going to become of all the 3000 – 4000 s.f. 2 and 3 story tract homes in the Temecula Valley long term. I’m glad I sold mine and I learned my lesson about “bigger is not always better”. Live and learn.