A modern, open floor plan is a big help. If you stop building walled-off kitchen/dining/family/living spaces, you have a lot more efficient use of the space you actually use.
Reuse of space is also huge. You can temporarily rearrange furniture for a big dinner and put it back before it's time to sleep.
Another angle... if you stand to save $100k building your house, you can save a lot of money by putting up your family in a nearby hotel overnight.
I though that fad was gone. That's a nightmare in real use. I don't want the meat grease smell in my bed. I don't want the kitchen noise while watching TV in the sofa or chatting in the living room. I don't want the music or the children noise in the kitchen. And I especially don't want all visitors packed together in the same space 24/24, without any half-privacy time to spend in smaller groups.
Oh, and since I am the kind of person who spends most of parties inside the kitchen rather than in the living or dining room, how do I manage? :-)
In practice, when I have people over, we still spend a lot of time in the kitchen/dining area--which is also sort of the "mud room" etc.--but the entertaining/hangout area is still somewhat separated.
I think more open floor plans than was historically the norm make sense--especially in smaller areas. But, if you have the space, walls can still be useful.
I think about this a lot too. I have a real minimalist streak and occasionally entertain fantasies of radically downsizing my life. 95% of the time, I could be quite happy in a few hundred feet.
But that other 5% of the time, I'm having friends over and cooking or entertaining. At that time, I really appreciate having more space.
> Also, if the answer is just to go to restaurants/bars for all social events, that would seem to be more expensive in the long run.
Unless you entertain a lot, I think owning your own home large enough to entertain is the more expensive option in the long run.
Having a couple stay for three months would be troublesome, but dinner for eight or ten is perfectly doable.