I've been working on a house that has a step-down living room. A feature in many early 20th century homes and historic ones as well, the step down or sunken living room seems to have fallen out of favor (I even had a hard time finding images to share!). I think, however, that the step down living room provides a great hint of glamour and interest to a home, what do you think? Generally these are 1 or perhaps 2 steps of 4" each, nothing major. Everyone knows descending a staircase is the best way to make an entrance -most houses in movies feature a step down into the main space for this very reason. How else could Joan Crawford or Bette Davis enter a party with a splash? For instance, the home from the movie 'the holiday' which Cote de Texas recently featured (seen above) is worth of a movie-star entrance.
Of course the reason this feature is not regularly found is for practicality: accessibility and ease of structural building (read $$). I feel however it's such an easy way to get a taller ceiling in a room and also provides access to a terrace and is a wise place to spend a little $ for a lot of style. I found this rather unattractive room below doing a google search above -however, the step down living room was listed as a selling point! Return on investment!