According to a report on CNNMoney, the American home is shrinking. Toll the bell for the McMansion.

After years of growth, the Census Bureau recently reported that median new home size fell to 2,135 square feet in 2009 after peaking at more than 2,300 earlier in the decade. That is a significant drop….almost 7%!

“As we see two economies emerge, the averages will shift,” says Leonard Steinberg of Prudential Douglas Elliman managing director of New York’s leading residential real estate brokerage. “Most middle and lower income homeowners do not use or need a formal dining room, let alone a double height ceilinged entrance hall: With new technologies come new efficiencies. A large screen TV used to take up about 12sf ….now it hangs on the wall. Architects are becoming more focused on engineering useful space rather than creating large spaces. Of course, the very wealthy will still have their Mc Mansions, but even in this arena we are seeing a remarkable shift towards energy efficiency and it has become fashionable to boast of a home’s eco-friendly features.”

So, how could New Yorkers shrink their space, considering homes here are significantly smaller (and thereby much more efficient than suburban homes):

1)  Use skinny plasma TV’s mounted on the wall.

2) Double up: a wall that has bookshelves built in to it uses the space of the wall. Better still, store the books away and use a KINDLE or I-pad to store thousands of books. If you dine formally once a year, think about making the dining room more of a great room/study that converts easily for formal dining.

3) Scale your furniture differently: Many, over-stuffed, over-sized furniture items achieve the exact same comfort levels as much smaller pieces that use up much less square footage.

4) Engineer your storage: Closets should be engineered for maximum usage. Use ‘void spaces’ those little pieces of space under stairs, above closets, etc where outstanding storage opportunities exist used creatively.

5) If you have those hideous through-the-wall AC systems, box around them to add storage as well as hide them from sight. Still better than those vile window units that are both ugly and super-inefficient.

6) Store under the bed, possibly utilizing this as a closet rather than just ‘junk space’….there are interesting applications for this.

The downside to shrinking homes? The cost per square foot will rise.