3-bedroom vs. 4-bedroom Home Resale Value: Is the Addition Worth It?

One of the first things buyers consider when starting the house hunting process is the number of bedrooms. They usually have a minimum bedroom requirement and an ideal number they would like in their homes. An extra bedroom can be used as guest space, a home office, a hobby room, or simply a storage area. 

The COVID-19 pandemic caused a spike in demand for home offices, increasing the value of houses with extra rooms – including bedrooms. As people realized working from home was going to be permanent, employees needed formal workspaces. Camping out at the kitchen table wasn’t sustainable. 

Experts believe an extra bedroom adds 15 percent to your resale value, and the average cost of a bedroom addition is around $50,000. If you are considering adding a bedroom to your home, evaluate the value you will get from it while living in your space along with the long-term resale value. 

This article can help you make this decision. It will compare the 3-bedroom vs. 4-bedroom home resale value to help you determine if it’s worth the effort to upgrade to a 4-bedroom home. Here’s what you need to know.

3-bedroom vs. 4-bedroom Home Resale Value: A Comparative Analysis

Many homeowners want clear-cut answers as to whether their 4-bedroom house will sell faster and for more than a similar 3-bedroom property. However, it’s not as simple as identifying the median sale prices and demand for specific housing types. Various factors contribute to demand and home values, which can impact your home sale. 

The same answer can be given to buyers who might be considering a 4-bedroom over a 3-bedroom now because of resale value. Current economic trends do not predict the health of future markets. Just because there is a low inventory of certain home types right now doesn’t mean that demand will remain high until you move again. 

Here are a few common reasons why people design and invest in 4-bedroom houses and whether the upgrades have significant impacts on their real estate prospects. 

Price Comparison

The average sale prices of 3-bedroom and 4-bedroom homes will vary depending on where you are buying or selling.

One real estate agent in Portland, Oregon, for example, crunched the numbers and determined that a 4-bedroom house would only sell for around $500 more on average than a 3-bedroom model. That’s not a significant amount in the world of real estate, but especially for Portland where the median home sale price is $541,010.  

While four-bedroom homes will sell for more, it is usually because they have more square feet and space as a whole. The existence of an extra bedroom itself might not make a house stand out, especially if other comparative homes have more bathrooms, home offices, and general space.

Time on Market

Along with property value, homeowners are often worried about the expected time on market for their homes. They want their houses to sell quickly so they can move out and start the next chapters of their lives.

However, a 4-bedroom house might not sell faster than a 3-bedroom house, even if the extra bedroom is more desirable. External factors like the home’s location and condition could keep one property on the market over another. 

Individual markets can also shape buyer demand. If you live in an area with young professionals and couples, three-bedroom starter homes might be in higher demand. These houses will likely be smaller, which means the property taxes are more affordable. Potential buyers in your area might not be able to afford the higher prices and taxes that come with four beds.  

One thing you can look at is the macroeconomic trends shaping home sales. The housing market slowed significantly in January 2024, with home sales taking around 69 days to sell. This is normal for the winter months when the real estate market cools alongside the outside temperature.

However, by June 2024, the median time to sell dropped to 45 days. Knowing national and local home sale trends can help you estimate how long it will take to sell your home, regardless of the number of bedrooms.

Buyer Preferences

Every buyer is unique and has their own bedroom needs. A buyer who lives alone might only need two bedrooms: a primary and a home office/guest room combo for the second bedroom. However, a family that has lots of kids and aging relatives living together will need considerably more space. 

Real estate agents often recommend buying houses with no fewer than three bedrooms. This allows a couple or small family to have enough room. Three-bedroom homes are also good starter homes. A couple can start their lives together in that space and small kids can share a bedroom until the family moves to a bigger space. 

Because a three-bedroom property is the minimum for family housing, there really isn’t a significant difference in demand for three or four-bedroom houses. Many buyers feel like an extra bedroom is a perk, but not a necessity.

If you are considering adding an additional bedroom to boost resale value, you might not see a significant jump in demand and pricing if you upgrade from a three-bedroom to a four-bedroom house as compared to moving from a two-bedroom to a three-bedroom house.

Factors Influencing 3-Bedroom vs. 4-Bedroom Home Resale Value

The reality is that every listing has multiple moving pieces and it is nearly impossible to determine the value of adding more bedrooms to a space. The only way to accurately evaluate the benefit of adding an extra bedroom is to sell two identical houses at the same place and at the same time, with the only difference being the number of bedrooms.

This is often the case with new construction homes, as builders will charge more for the extra bedroom. However, when selling existing homes, there are too many differing pricing factors to consider beyond bedroom count. 

Here are a few key drivers that affect resale value and contribute to the price of your home. Even if you upgrade your space to four bedrooms, other factors working for or against you could have a greater impact on your listing price. 

Location

The location of a house is one of the biggest drivers of pricing in the real estate market. Not only do housing prices vary on the national scale, but pricing can change by tens of thousands of dollars (and even hundreds of thousands of dollars) depending on the neighborhood and the placement of specific houses within that neighborhood.

Here are a few ways that location affects pricing: 

• City: Home prices in San Diego and New York City will be higher on average than similarly-sized homes in more affordable cities. You need to focus on the home prices in your specific town. 
• Neighborhood: Desirable neighborhoods will have higher home sale prices. Adding a bedroom in an average-demand neighborhood might not attract buyers like a new listing in a popular area. 
• School District: Two of the same houses across the street from each other could have different sales prices if one is located in a desirable school district. This is particularly true for family homes with three and four bedrooms. 
• House Placement: The location of specific houses makes a difference. Homes near busy streets, active train tracks, or shopping centers tend to sell for less. 
• Proximity to Amenities: Houses with easy access to nature trails, public libraries, city parks, and other desirable amenities tend to have higher values. 

Location is the one thing you cannot change in your house. You can renovate every room and add extra living space, but your parcel of land will not change. Consider how your location affects your home values before evaluating the potential price increase that comes with adding a bedroom. 

Size and Layout

It’s also hard to quantify the value of adding an extra bedroom without considering the overall size of a house and its layout. For example, a three-bedroom property with ample space might have extra rooms allocated as home offices, entertainment spaces, and dens.

Even though the house only has three bedrooms, there is plenty of space for families to relax. This type of house would likely sell for more than a four-bedroom home with significantly less square footage and smaller rooms. 

The quality of the added bedroom will affect how it boosts your resale value. If your added bedroom is designed to support your aging relative, it could be large enough for sleeping and working and have an en suite bathroom with a tub, shower with safety rails, and a sitting area for hair and makeup. This will have a bigger impact than a small extra bedroom without a dedicated bathroom. 

Bedrooms are not monoliths. They vary in size, design, and amenities. This is why it is impossible to compare two newly designed bedrooms or a house with three beds over one with four.

Market Demand

Not only does location impact home values, but it also affects market demand. Different locations attract specific demographics that have specific needs. Here are a few examples of market demand changing because of demographics: 

• A region that attracts retiring adults might see higher demand for single-story homes with two bedrooms. These houses appeal to adults who cannot walk up and down stairs and who don’t need extra rooms to accommodate their kids. 
• An area with a lot of families might have high demand levels for four and five-bedroom homes. The families want enough space for their kids as they get older. 
• A neighborhood that is within walking distance of city nightlife might attract single buyers, couples, and young families. Demand might be higher for two and three-bedroom start homes.

In some areas, a fourth bedroom is considered a nice upgrade or a bonus room. However, four beds are the minimum expected number for most homes. Knowing your local market demographics can help you decide whether adding an extra bedroom will elevate the value of your home in the area.  

Condition and Upgrades

The condition of the home also impacts the listing price. Two properties with the same square footage in an identical real estate market could have different values if one house is well-maintained with upgraded appliances and fixtures. An estimated 70% of buyers want turnkey homes that don’t require additional repairs or renovations. They want to move in and start living. Even if your bedroom addition creates more living space, it could still sell for less if the house needs work.

If you want to add more bedrooms specifically to increase resale value before you sell your home, consider what other projects could have a bigger effect. You might be better off renovating bathrooms, updating your kitchen, and making major repairs instead of taking on this large construction project.  

Talk to a Real Estate Agent About Your Local Market

The number of bedrooms in a home is rarely the top factor for buyers. While many buyers would prefer a 4-bedroom home over a 3-bedroom property, the size, layout, and location of the home are often more important.

Buyers who desire master bedrooms might opt for 3-bedroom homes with large primary spaces. They also might be attracted to houses with other rooms that meet their work and recreation needs. Space for a home gym or office might win out over a guest bedroom.

If you are worried about the impact your bedroom addition will have on your resale value, talk to a Realtor in your area. You can discuss the housing market and ask if an extra bedroom would lead to a higher resale value in your neighborhood. Many agents are happy to share their insights and help you prepare your home for listing.

To find a Realtor near you, turn to FastExpert. You can read agent profiles and find experts who meet your needs.

Not only do you need to find someone with the right experience, but you also want to hire an agent who is a good personality fit. Visit FastExpert today and hire a real estate professional you can trust.