Most of our friends simply cannot wrap their minds around living in as small a space as we do (2-bedroom apartment condo ~1k-sq-ft). They also like to whine about how 'lucky' we are to live so close to work.
Due to our move last year we have a slightly longer commute than we did before, but the extra mile difference is negligible compared to the 40- to 50-mile commutes our friends and coworkers put themselves through so they can live in a "nice place", even though visitors always remarked how beautiful our old townhouse was (which was 2.5 miles from work). I think "nice place" is just code for "gigantic place".
Indeed our realtor was surprised by how hard it was to get a decent offer on the townhouse. We had upgraded it nicely over the years and the circular street it was on wound around a large grassy lawn maintained by the HOA and gave a very cute good-neighborly vibe. But, no, most house shoppers who came along found the 1,450 square feet too small for their taste. We found this baffling as even with a kid and three cats we had long felt like we were wasting time, money, and effort maintaining far too much space for our needs and comfort.
We do occasionally miss the spacious kitchen and the basement we'd sometimes use for movie watching. But overall we don't miss the never ending and stressful maintenance costs.
Occasionally DH tries suggesting the idea of downsizing to coworkers (like say from 5500 sq ft down to 2500) to save either on housing or commuting costs. This wouldn't even necessarily involve going to an attached home such as a townhouse or condo (but in our area would that likely result in good savings on both housing and commuting). But their minds always reject the idea outright. "Nah, I couldn't do that! I need my 5,000+ sq ft because.... occasional parties! And feeling rich! And sunk costs!"
One coworker lives with her grown son an hour away from the office. She's okay with a townhouse, and could easily find one at the same price much closer to work to cut her commuting distance in half (extra easy when you don't have to worry about the reputation of local public schools), but just can't bring herself to even think about the fuss of moving.
My parents are retired empty-nesters who could also do with a significant downsizing, but instead opted for a reverse mortgage rather than deal with the trouble of purging all the accumulated excess and selling the place to move somewhere smaller. My mother is pushing 80 now and and has known for years it would be beneficial on many levels to get rid of a lot of stuff and downsize to a cheaper area, but as she claims, she "just can't think about that right now."
I'll grant that moving is a big stressful pain in the arse but to me not more so than commuting every day from a distance I would only consider driving for the occasional weekend getaway. Or living in a house much larger than you've need in a very expensive neighborhood for which tax, maintenance, heating/cooling, lawn care, etc. costs are bleeding your funds profusely because you just can't bring yourself to deal with the hassle of moving.
Having also started working on embracing the principles of minimalism we've gotten rid of enough stuff to give the apartment a very spacious feel so it really does not feel like we are sacrificing space. I also like to think of it as the kind of setup that city dwellers pay through the nose for, except we're way out out in the quiet leafy burbs so we get the effect for a fraction of the cost (and a fraction of the noise).
Apartment condos have their downsides for sure. If you end up with an unstable neighbor there is little anyone can do to help you with noise and harassment problems unless that person manages to get themselves arrested and/or committed. You can get the cops to come out and harass them in return but that won't do much to resolve the issue. (We actually did have this problem, but luckily - and it really was luck - events unfolded to work out in our favor and the neighbor situation is fine now.) I'd recommend knocking on a few neighbors doors to ask about that if you are interested in shopping for a condo.
But I will say that townhouses are a good middle ground if they are available, as they provide a spacious, fairly private, and relatively affordable alternative to typically overpriced single family homes in a high-cost housing area. Some of the newer ones are built quite huge (~2500-sq-ft) with a covered garage to boot.
On top of savings from reduced mortage, taxes, utility, and maintenance costs, an added advantage of our little condo is one that may be familiar - space constraints tend to help you stop yourself from buying stuff you don't need. Extra savings toward my freedom in the increasingly foreseeable future.