Everyone knows that home prices have declined.

It’s only serious buyers who know that another key measure is on the decline – square footage.

After ballooning more than 50 percent since the 1970s, the average new home size peaked at 2,309 square feet in 2007, and declined to 2,094 in 2009, according to the U.S. Census Bureau.

Like other statistics, square footage figures can be confusing to home shoppers.

Here, a guide to making measured, sound judgments about the size of homes:

WHAT TO COUNT
Real estate agents usually rely on owners’ information when they list square footage.
Owners can remember a wrong figure, however. When a buyer has a home professionally appraised, it’s not uncommon for the official footage to be revised downward, notes Diane Saatchi, senior vice president of Saunders & Associates, a Bridgehampton, N.Y., realty firm.

No single nationwide standard exists as to how builders and home sellers must calculate footage.

However, an appraiser – who provides a report required by a lender before he grants a mortgage – follows voluntary standards developed under the auspices of the American National Standards Institute, explains T.J. McCarthy, who teaches at the Chicago-based professional group The Appraisal Institute.

Basically, for a detached home, the ANSI rules allow measuring from the exterior walls of each floor, as long as the area inside is finished, heated, and above ground. Basements aren’t counted in the “gross living area,” but are noted in another category that would also include areas such as screened porches, says McCarthy. Airy second floor volume created by high foyers also isn’t considered in the gross living footage.

Although appraisers follow the ANSI measuring standard, builders and others may not, and local practices come into play as well. Buyers may want to ask what’s included in a stated count.

MAKE FAIR COMPARISONS
Misleading though they may be, we love to analyze homes with numbers. “You will always hear people refer to a home by its price and also its square footage,” notes Andrew Porth, a Red Lodge, Mont., architect.

If you’re comparing similar condominiums, price-per-square-foot costs may provide a good indicator of relative values, says Saatchi.

But making such comparisons is often useless, since many homes have vastly different amenities. A 1,900-square-foot home with three baths and many windows may very justly cost more than a 2,300-square-foot place with just two baths, since the smaller home involves more expensive supplies and construction, explains Katherine Austin, Sebastopol, Calif., architect.

THINK NEED, THEN SPACE
Americans have been conditioned to think that bigger is better, observes Porth. But now that builders are shrinking homes and consumers have become more practical in this shaky economy, he believes that homebuyers are becoming less enamored with large size.

“It comes down to finding the space that’s functional for you,” Porth says.

Indeed, a recent survey by the National Association of Home Builders finds that builders are jettisoning features that homeowners don’t actually use frequently or that buyers don’t value highly – features like desk areas in kitchens, media rooms and two-story foyers, says Stephen Melman, director of economic services for the NAHB.

Look at how you live, what storage needs you have, and evaluate whether a particular home has the floor plan and closet space to fulfill your needs. For example, if your family reads a lot and tends to congregate in the family room, a home with a spacious family room lined with bookcases could be right for you. The experts agree: Space needs are individual and a single square footage number doesn’t convey enough.