What's the difference in home value of a 3-bedroom vs. a 4+ bedroom home of the same size? I thought it would make sense to see what the difference is, and to break it down BY HOME SIZE. There are two sets of data. The first set compares average sale price for 3-bedroom homes vs. 4+ bedroom homes BY HOME SIZE. The second set shows average price per square foot BY HOME SIZE.
In creating the following charts, I did not have the option to compare 3-bedroom homes with 4-bedroom homes. Therefore, the closest I could do is 3-bedroom homes vs. 4-or-more-bedroom homes. Keep in mind that as the home size increases, we are more likely to be including more homes with 5+ bedrooms in the comparison. Still, I feel that these statistics are useful.
What the numbers show
Disclaimer: The charts below represent live data from the MLS, updated monthly. The following summary represents the findings of the data trends at the time this was published, in March 2019.
For the Ann Arbor / Washtenaw County market, having an extra bedroom for the same home size does increase the home’s value, both in sale price and cost per square foot. And while some people may see this as something obvious, this does not apply in other areas, such as neighboring Oakland County. The high cost per square foot in Washtenaw County, and the large rental population likely come into play as we see the “beds and heads” rule applies: the more people who you can accommodate in the dwelling for sleeping quarters, the more valuable the space. This rings true even for smaller homes, whereas in areas not dominated by the “beds and heads” rule, buyers favor better use of space (larger bedrooms, bathrooms, or common areas).
That being said, the data trends becomes less clear in the 2600-3000 square foot range. It’s important to acknowledge that this data is more likely to represent homes throughout the county, and therefore be more heavily influenced by the outlier areas that are less focused on university housing (such as Saline, Dexter, and outlier townships). To be sure, we would need to take a closer look at the data for each specific area. Homes over 3000 square feet clearly favor more than three bedrooms. Not only is there more space to accommodate a fourth bedroom, but in larger homes we are more likely to be comparing a 3-bedroom home with a home that has five or more bedrooms.
You may also be interested in:
- Oakland County - Impact of number of bedrooms on home values
- Livingston County - Impact of number of bedrooms on home values