1000 square feet is so small there isn't much to do and only so many ways to design it. IMHO you could easily find a small bungalow of that size, have the interior ripped out and taken down to studs, then totally rebuilt to exactly the layout you want and still be way under the cost of commissioning an architect to design something from scratch.
I'm intrigued to see that you consider 1000 sq feet (100 sq m) to be "so small". It's twice the size of the first house I owned (which was also 2 bed, and pretty typical starter size here) [1]
To me 1000 sq feet for 2 bedrooms sounds fantastic. So many ways you can use that space creatively. So many different layout options and shapes.
My recommendation would be to start with an architect. Given a good budget and defined parameters you should get something really good. And (at least here, don't know about there) architects like to be project manager as well to make sure their baby is executed well.
[1] starter apartments here can be under 200 sq feet. Not sure who wants that (they are typically quite expensive) but someone is buying them.
If you built a 1000sf detached home in North America you'd have a hell of a time selling it later on outside of some very specific conditions as it'll not be much cheaper than a 1500-2000sf home.
Home costs do not scale proportionately with their square footage. For example you still have one refrigerator in most homes regardless of size, one front door, pay base flat fees for services and trades just to show up, permitting fees, etc.
Along the same lines, adding bedrooms is basically free in terms of additional maintenance. Especially if you are not actively using them. All you will need to do is vacuum/sweep and dust in there once a month, maybe less often than that.
The only marginal financial cost will be energy required to heat and cool the space. Seeing as the original commenter is in the SeaTac area, with a temperate climate, one would think total energy costs tend to be low (I do not live there so I could be wrong).
In my market (smaller western us city), there are roughly 730 detached single family homes in the market. Only 25 are less than 1000 sq feet and none of those were built in the last 40 years.
It’s not that there aren’t any options that size, I happily spend the first decade of my adult life in residences that size, but dwellings that size are almost exclusively condos/apartments in the US. Others have noted some good reasons for that.
I'm living in the US but from a country where houses are generally smaller. Lots of land here in the US in suburban subdivisions seem to have minimum size restrictions. I think a few lots I looked at had minimums of 2500 sq ft. You don't have the freedom to build a smaller house.
In America a 1000 square foot house is small, it's just a fact. I personally wouldn't have a problem with it, and I live in 1300 square feet. But American family home buyers expect 3 bedrooms, 2 bathrooms, a den, etc. and that just isn't possible in 1000 square feet.
Building form scratch with an architect in America is also very, very expensive. I know folks that have gone down that route and it easily doubled the final cost of their home. What could have been a 250k property cost over 500k when all was said and done. It's just not common to see done unless you are wealthy.
1000 square feet is only small in the USA. 1000 sqft is the average size of a home in Japan. 50% are smaller. There's plenty of creative ways to use 1000 sqft
This is a good idea. What I've run into is that bungalows like this exist in my area (Greater Seattle/Tacoma) but look like shit and were built 80-100 years ago. My research has shown that older homes have all manner of issues with plumbing, electrical and so on. So rebuilding it from its guts looks like it could take care of a lot of that.