Naima Fuller
The number of bedrooms in a house is an important factor when it comes to selling. While there is a common perception that more bedrooms lead to higher value, the reality is that it depends on various factors such as location, target market, and overall living space. For instance, in certain neighbourhoods, a minimum of four bedrooms may be preferred, while in other areas, three bedrooms are more than sufficient. Additionally, the average household size has decreased over the years, which has led to a shrinking buyer pool for larger homes. Factors such as community type and homeowner association rules can also influence the demand for a specific number of bedrooms.
| Characteristics | Values |
|---|---|
| Are 3-bedroom houses easier to sell than 4-bedroom houses? | It depends on the area and the target market. In some areas, having 3 bedrooms is considered ok, while in others, it is believed to be a negative. |
| Average household size | The average US household size was 2.51 in 2023, down from 2.58 in 2010 and 3.68 in 1940. |
| Price difference | Choosing a 3-bedroom house over a 4-bedroom one can result in significant savings, with Sydneysiders saving up to $335,000 and Hobartians saving $225,000. |
| Resale value | 3-bedroom houses have better resale value than 2-bedroom houses, especially outside of 55+ communities. |
| Time on the market | There is no significant difference in the time it takes to sell 2-bedroom and 3-bedroom homes outside of 55+ communities. |
What You'll Learn
Three-bedroom houses are more expensive than two-bedroom houses
Three-bedroom houses are generally more expensive than two-bedroom houses. While this does not necessarily mean they are more valuable, data shows that three-bedroom houses tend to have a higher price tag. For instance, in Bakersfield, California, the average price of a two-bedroom house was $221,658, while the average price of a three-bedroom house was $241,907, a difference of $20,249. This trend is not limited to a specific region, as the average three-bedroom home value across the United States ranges from $163,000 in West Virginia to about $900,000 in Hawaii.
There are several reasons why three-bedroom houses are more expensive. Firstly, they offer more space and utility for families, including extra bedrooms that can be used for guests, a home office, or leisure activities. This additional space is often valued by buyers, driving up the demand and cost of three-bedroom houses.
Another factor contributing to the higher price of three-bedroom houses is the target market. Outside of 55+ communities, three-bedroom houses tend to attract a larger pool of buyers. This increased demand can lead to higher prices, as sellers can cater to a wider range of potential customers. On the other hand, within 55+ communities, the demand for three-bedroom houses is lower, and they may even take longer to sell compared to two-bedroom homes.
It is worth noting that the impact of an extra bedroom on the price of a house can vary depending on the overall size of the property. For example, in Portland, Oregon, there was no significant difference in the selling price of three-bedroom and four-bedroom houses within a similar size range of 1,800 to 2,500 square feet. Therefore, simply adding more bedrooms to a house may not always result in a higher price; it is the combination of space and functionality that influences the value.
Additionally, it is important to consider the local market trends and buyer preferences when determining the impact of bedroom count on a home's value. While three-bedroom houses generally command a higher price, there may be regions or communities where buyer preferences differ, and the presence of an extra bedroom may not significantly affect the selling price.
In conclusion, while three-bedroom houses tend to be more expensive than two-bedroom houses, this does not always equate to higher value or faster resale. The price impact of an additional bedroom can vary based on location, community type, and overall property size. Therefore, it is essential to consider various factors, including local market trends, buyer demographics, and the specific features of the property, when determining the value and marketability of a house.
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The demand for larger homes has decreased
The average household size has decreased over the last few decades. In 1940, the average household had 3.68 people, while in 2010, this number dropped to 2.58. In 2017, there was a slight increase to 2.65 due to the rise of multi-generational living and grown-up children living with their parents. However, by 2023, the average household size in the United States had decreased again to 2.51. This shrinking household size has resulted in a decreased demand for larger homes.
From a real estate industry perspective, there is a noticeable shrinking buyer pool for larger homes and a rising buyer pool for smaller homes. This trend is also reflected in the data for detached homes sold in Portland, Oregon, from January to April 2023. Out of the 1,959 detached homes sold, 890 were three-bedroom homes, 531 were four-bedroom homes, and only 40 had six or more bedrooms.
Additionally, when comparing homes within a similar size range, there was no significant difference in the selling price between three-bedroom and four-bedroom homes. This suggests that having an additional bedroom does not necessarily increase the value of the home. In fact, adding too many bedrooms into a smaller home can decrease its value. For example, five-bedroom homes within the same square footage range sold for $49,000 less on average than three-bedroom homes.
The decrease in demand for larger homes can also be attributed to the challenges first-time homebuyers face due to rising home prices, high-interest rates, and low inventory. The average US home price has surged by 54% since 2019, with a 5.8% increase in the last year alone. High-interest rates, currently hovering around 7%, also make it challenging for first-time buyers to enter the market.
Furthermore, low inventory caused by homeowners feeling "locked in" to their current houses due to low-interest rates contributes to the decreased demand for larger homes. Homeowners who give up their current interest rates may have to pay significantly more in monthly principal and interest payments if they move to a new home. As a result, they choose to stay put, reducing the number of larger homes available on the market.
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A three-bedroom, two-bathroom configuration is the most saleable
When it comes to selling a home, the number of bedrooms and bathrooms can impact its marketability. In general, a three-bedroom home is more saleable than a two-bedroom home, as it offers more flexibility and space for a growing family. However, there are exceptions to this, and the decision to remove a bedroom should be made carefully, considering current and future lifestyle needs. For example, a young family planning to have more children may need the extra space that a third bedroom provides. On the other hand, for empty nesters or those looking to downsize, a two-bedroom home might be more suitable.
The resale potential of a home is also influenced by the target market. While families are a significant segment, there are also buyers who are single or looking to downsize. In such cases, a two-bedroom house could be more attractive. Additionally, in certain communities, such as 55+ communities, there is lower demand for three-bedroom homes, and they may take longer to sell.
It's worth noting that while bedroom count is important, other factors also influence a home's value. Location, lot size, amenities, remodelling, and square footage all play a role in determining a home's resale value. Therefore, when preparing a home for sale, it's crucial to showcase its unique features and highlight any additional benefits that would appeal to buyers.
In summary, while a three-bedroom, two-bathroom configuration may be the most saleable overall, it's essential to consider the specific market and buyer demographics when determining the saleability of a property. Understanding local trends and buyer preferences can help inform decisions about renovations, remodelling, and the overall presentation of the home to maximise its sale potential.
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Four-bedroom homes may be less desirable in 55+ communities
Secondly, the average household size in the United States has been decreasing over the years, with the number dropping from 2.58 in 2010 to 2.51 in 2023. This shrinking household size reduces the demand for larger homes with more bedrooms.
Additionally, homes in 55+ communities are usually designed for two people and often consist of apartments or condos, which are generally smaller in size compared to houses with four bedrooms.
Furthermore, resale value matters when purchasing a home in a 55+ community, and four-bedroom homes may face challenges in this regard. The target market for these homes is limited to buyers within a specific age demographic, and the pool of potential buyers may shrink as the older generation passes away.
Moreover, new construction in active adult communities can also pose competition for resale homes, particularly if the developer continues to build and expand the community. Lastly, the presence of strict rules and regulations in some 55+ communities, such as restrictions on guests' ages and pets, may further limit the number of potential buyers.
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The minimum preferred bedroom count varies from place to place
Additionally, local regulations and building codes can impact the minimum bedroom count. National and local building codes ensure that homes are not falsely advertised and that bedrooms are safe and habitable. Factors such as ceiling height, heating and cooling requirements, emergency exits, and window size all play a role in determining if a room can be classified as a bedroom. These factors can vary from state to state, and it is essential to understand the specific requirements in your area.
The real estate market also plays a role in determining the preferred minimum bedroom count. In some neighbourhoods, a 3-bedroom house may be considered acceptable, while in others, buyers may insist on a minimum of 4 bedrooms. This can be influenced by the mix of housing types in the area, with some neighbourhoods offering a combination of 3 and 4-bedroom homes, while others may predominantly feature larger homes.
It is worth noting that while bedroom count is important, other factors also influence a home's value and desirability. These include location, lot size, amenities, remodelling, and overall square footage. A home with a well-utilized layout, adequate living space, and desirable features may be more attractive to buyers, even if it has fewer bedrooms.
In conclusion, the minimum preferred bedroom count varies from place to place, influenced by community type, household size, local regulations, and market trends. It is essential to consider these factors when buying or selling a home to ensure that the property meets the needs and preferences of potential buyers in that specific area.
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Frequently asked questions
It depends on the area and the target market. In some areas, 4-bedroom houses may be harder to sell than 3-bedroom houses, especially if the 4th bedroom is small or awkwardly placed. However, in other areas, a 4th bedroom may add value to a house, making it more desirable.
The number of bedrooms, the size of the house, the location, and the target market all play a role in determining the resale value of a house. For example, in 55+ communities, a 2-bedroom house may have better resale value than a 3-bedroom house, as the demand for the 3rd bedroom is lower in these communities.
Yes, according to a real estate trend analysis, the average household size has decreased over the last few decades, leading to a shrinking buyer pool for larger homes and a rising buyer pool for smaller homes.
