At what point does it make sense to steal space from that 4th bedroom to do something else with the square footage?
Or, to rephrase, what's the difference in home value of a 3-bedroom vs. a 4+ bedroom home for the same square footage? I thought it would make sense to see what the difference is, and to break it down by homes size. After doing many CMA's of 3-bedroom vs. 4-bedroom homes, my theory was that it would make little difference for smaller homes, but there would be a threshold in home size after which a 4th bedroom might offer a premium overall.
I have compiled the following data and presented it BY HOME SIZE. There are two sets of data. The first set compared 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.
- Not all square footage is created equal. It really does depend on what you are going to do with the extra space. A buyer may see a lot of value in a master bathroom and a master bedroom that can comfortably accomodate a king-sized bed. A buyer may also see a lot of value in a 2nd-floor laundry room if all of the bedrooms are on that floor. A buyer may not be thrilled with a 4th-bedroom turned custom closet, if adequate closet space is already available.
- 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.
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- Oakland County - Impact of number of bedrooms on home values
- Washtenaw County - Impact of number of bedrooms on home values