Small homes are cheaper in the East

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

How many bedrooms does the average home have? And how much would an extra bedroom cost you?

In order to answer these questions, we take another look at the U.S. Census Bureau’s Survey of Construction data. First of all, let’s make a map showing in which parts of the country houses have the highest average number of bedrooms:

Percentage of homes with 3+ car garages

As you can see, the average number of bedrooms ranges from 3.2 in New England to 3.8 in the Pacific region. Still, three-bedroom houses seem to be the most popular choice almost everywhere. And if we look at the data through the years, we notice that there is an upward trend in all regions except the Northeast:

The average number of bedrooms increased from 3.4 in 2000 to almost 3.6 currently. Every region has seen an increase except for the Northeast, where the number stayed roughly the same. Though the data is quite noisy, the trend is still statistically significant; the p-value is less than 10 -25.

Now we want to see where an extra bedroom would cost you more. The problem is that real estate prices heavily depend on the location themselves. To create a way around this, we considered three-bedroom house prices as a reference level. Now, let’s take a look at how location price premiums change for different numbers of bedrooms:

all-us-gar

Here the red color means a smaller premium (lower prices). As you can see, this is highly dependent on the region, but as a general rule, larger houses are somewhat cheaper the closer you get to the West Coast. Naturally, those who live close to the East Coast enjoy relatively lower prices for houses with no more than two bedrooms.

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About Andrey Kamenov

Andrey Kamenov

Andrey Kamenov, Ph.D. Probability and Statistics

Andrey Kamenov is a data scientist working for Advameg Inc. His background includes teaching statistics, stochastic processes and financial mathematics in Moscow State University and working for a hedge fund. His academic interests range from statistical data analysis to optimal stopping theory. Andrey also enjoys his hobbies of photography, reading and powerlifting.

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