The market for small living spaces is expanding.

"San Francisco and New York City have plans to build experimental 'micro apartments,' and a small tiny-house community has popped up on the outskirts of Washington, D.C.," according to Business Insider.

At first, the idea of cramming all your possessions into less than 200-square-feet may be horrifying. At the same time, the idea of minimalist living is attracting more and more interested buyers.

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Design is the key to making small spaces livable. How do they do it? Click here to see what it's like to live in an 89-square-foot home.

(MORE: More Americans are Moving Again)