Are 4 Bedroom Homes ALWAYS worth more in Baton Rouge Appraisals?

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Real Estate Appraiser with Accurate Valuations Group, LLC LA St Certified 851

Bedroom adjustments - is 4 Bedroom ALWAYS worth more? by Dave Towne

SEE MY COMMENT below Dave Towne's comment. For the past 30 days, I've certainly been reconsidering adjustments for 3 vs 4 bedroom homes and have been less likely to apply an adjustment. It's all situational based on that immediate market and what type of housing.

In a downtown setting, senior community or recreational area, there's not as much of a difference in 2 vs 3 or 3 vs 4 bedrooms. However, in a normal suburban track homes neighborhood, there could be more difference.


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Washington State Appraiser, Dave Towne, comments on this situation based on Ryan Lundquist's recent article 

There are a number of urban myths floating around real estate sales people, and appraisers … which basically say that the more bedrooms a home has, the more the home is worth. Thus, fewer bedroom homes should always be ‘adjusted’ up.

‘taint necessarily so. For perspective, read Ryan Lundquist’s blog here:

How much value does an extra bedroom add? 

As Ryan writes, it depends!  Here's one excerpt from Ryan's post, 
"Diminishing value with each bedroom: Generally speaking the added value of extra bedrooms tends to diminish with each additional bedroom. It’s sort of like how you pay less for each ounce of Starbucks coffee the more you buy. In other words, the value difference between a 1-bedroom home compared to a 2-bedroom home could be far more substantial than the value difference between a 2-bedroom home and a 3-bedroom home (or 3-bedrooms vs. 4-bedrooms)." 


Dave Towne continued...I can attest to two different market studies I did this past year, in two different cities, to see what the difference was between the same newer age/roughly same size homes with 3 and 4 bedrooms in the same subdivision.

Both studies were exactly opposite! In one, the 4 BR homes sold for less than the 3’s. And in the other study, the 4’s sold for more.

Another study I did was in an older neighborhood mixed with 2 and 3 BR homes. Again, homes of roughly the same age and size were used. In that case, the 3 BR’s did sell for more.

Bottom line: there is NO ‘one’ adjustment we can use for bedroom count differences across all types and ages of homes.




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MY COMMENT (from Bill Cobb Appraiser Baton Rouge): 

In a downtown setting, senior community or recreational area, there's not as much of a difference in 2 vs 3 or 3 vs 4 bedrooms. However, in a normal suburban track homes neighborhood, there could be more difference.

My Comment and Image In This Share is from my own recent study And POLL of local Realtors. Subject was a 3 bedroom 2600sf home in a predominantly 4 bedroom subdivision.

Here's what GBRMLS reveals over a 2 year period in an MLS Area :
29 3 Bedroom sales median sold is $226,000 and $96/sf
152 4 Bedroom sales median sold is $233,750 and $95/sf

4 BEDROOM HOMES SELL FASTER!
4 Bedrooms sold in 57 days vs 70 days for 3 bedrooms

However, Agents were divided in their opinions of 3 vs 4 bedrooms:

" I would expect to pay about the same. The 3 bedroom floor plan is going to have a larger kitchen and/or living room, etc.. "

VERSUS

"Yes, I would expect to pay less for a 3 bedrooms. Sure, it has larger living room and other rooms, but the actual 4th bedroom should add MORE value per square foot. I would think maybe...depending on the area, $5,000-$10,000 difference.

GBRMLS Search Parameters:
Area 43
$190K to $300K
2200sf to 3000sf
21-30yrs+
1/1/2014+

GREATER BATON ROUGE REAL ESTATE DATA NOTE:
Based on information from Greater Baton Rouge Association of REALTORS®\MLS for period 01/01/2014 to 05/12/2016, extracted on 05/12/2016.

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