Hello,
resize area has a timer of 1 hour. The only restriction I know of is that you need to wait 1 hour between demolitions. So if you issue the resize command, try to place a bigger house for 40 minutes without success and place again at the same place, you'll have to wait 20 minutes before doing a resize again.
There are 2 resize situations:
-if you have a condemned house, you'll be able to place only in the resize area. The determination of the resize area is quite buggy and I strongly suggest not to resize until you get rid of the other house. You can even place more than one house in a resize area (the server doesn't check for the number of houses when placing in a resize area). On test center, I was able to have a dozen 7x7 houses next to each other because I would resize a house and place 2 in the resize area. Then an hour later do it again. Quite amusing, but not really practical. If you just placed a house, you can resize the condemned house to make it active again and condemned the newly placed one. So, someone could keep 2 structures if they don't mind resizing all the time to avoid idoc (and the fun would stop when hitting a bug that makes the resize area smaller).
-if you only own the house you're trying to resize, you'll be able to place in the resize area and more. BEWARE, if you hit a bug and the resize area is smaller, someone else could place a blocker. Example: someone makes blood pools on the ground while you issue the resize command, the resize area will stop where the blood pool is (or one tile from the blood pool, potentially making your resize area smaller than what your house was), allowing others to place a blockers when the blood pool dissapear.
Bottom line, resize when noone is around ;-)
Zalfein
ps: if you have a ghost vendor directly next to your house, I would fear that you might need a 1 tile clearance to place again. So if the house is only 7 tile large, you would end up not being able to place back at all. On the other hand, I've placed house directly next to floating gozas just to be able to go to the 2nd floor and remove them.