1 story vs 2 story

Happy Wednesday everyone!

Question: If you had 2 homes, right next door to each other, built the same year, by the same builder, with the same upgrades, on the same lot size, and the same footage, but one is a one story home and the other is a two story home, which should sell for more?

I get asked this question a lot, and I’m sure most of my colleagues do as well. Some have a solid answer, others just kind of pretend not to hear it and move on. Allow me to tackle this question on today’s blog, using some construction and real estate terms to answer the question for you.

Answer: This is where most people will say the one story SHOULD sell for more, with everything else being equal. But the question is WHY?

Well, the answer is really mostly about construction costs, as well as usage. First and foremost, it is more expensive, for the most part, to build a one story home. This may sound counterintuitive, but it’s true. Most of the big ticket items in a house are Kitchens, bathrooms, foundations and roofs. Bedrooms, which really are four walls and flooring, are simple to create. Stairs can cost a little bit, but not as much as roofs and foundations.

Remember, we said two homes of identical size. So a one story home that is the same size as a two story home theoretically will have a foundation that is twice the size as a two story home (you’re building a stack of levels), and also will theoretically have a roof that is twice the size as a two story home (same concept). Assuming each home has the same amount of kitchens and bathrooms, the extra cost to build a single level home are obvious. So from a pure “construction cost”, Single level homes do cost more to build compared to a similar sized two story home.

Now, forget about construction costs for a while and concentrate solely on the “market” aspect of things. One of the terms we use a lot is usage, and market size. Quite simply, there is a portion of our market that will not even consider a two story or more home. Maybe they can’t handle the stairs. Maybe a Buyer has young children and worry about stairs, or they are at an advanced age and don’t want to deal with them up and down. Very rarely, when we talk to clients, are they adamant on a 2 level home, but often we discuss with clients who are only looking for single level homes.

Secondly, supply and demand plays into this a lot as well. As land values have increased over the years, builders are forced to put MORE home on LESS land, and the only way to do this is to build UP. In Las Vegas, for homes built after 2000, it really feels like that there is one single level home for every 2-3 two story homes. There are simply MORE 2 or more level homes available for sale. In fact, as of today, in our MLS, there are currently 1568 Single level homes built 2000 or later on the market, and 3064 2 or more level homes available on the market. And in the last 6 months, there have been 2887 homes SOLD that are single level (2000 and newer) and 5056 2 or more level homes that have sold during the same time frame.

So if you’re in the market, or considering selling your home, remember the 1 level vs. 2 level comparison. Expect to pay more “per foot” for a one level home of equal size and finish level compared to comparable two level homes. And if you’re thinking about selling your home, and you have a 2 story home, don’t look at one level homes as a direct comparison. The construction cost and market supply and demand do not allow a direct comparison.

Question for you? Do you prefer one story homes or two story homes? Why? Leave a comment below!