I read an article about a family downsizing from 2,500 square feet to less than 400!
It's fun to see; they homeschool at home, too! What could you go without if you were to lose more than 4/5 of your square footage?
Or perhaps it's more useful to think of what things you really need? It's a fun exercise.
My family needs:
A few books and toys
Bedding (this doesn't have to be stationary! My boys sleep on a sleeping bag on the floor)
And I can't honestly think of much else. What about you?