Adding new rooms -ground floor Vs second level.

We own a small 3bed 2bath home on a lot with enough room to expand. We are are adding a family room and one more bedroom and a bathroom. Because of the current layout, we are considering two options.

1. Expand into the backyard for a family room. Expand the front of the house to add a room and bathroom. Both the additions will be roughly 400sq ft each.

2. Expand into the backyard for the family room. And add one more level over the new family room for the additional bed/bath room.

I know that we have to get expert advice and estimates for what each option will cost, which we will do. But I want to get a general idea on what the difference for the two options would be, assuming the quality of materials used for both is the same.

Any information from people who have done this or are experts in the area is appreciated.

Thanks

Welcome RSMysore:
Building the second story is by far the cheaper option, albeit more trouble to raise the materials up to the second floor. The second floor will be built without having to pour another footer and build another foundation. The roof of the first floor will simply be raised up to go on the second floor.
So, you have to add floor joists, subfloor, floor covering, walls and one extra drywall ceiling; just imagine the savings.
Glenn

I hadn't even thought about the difference in roofing costs. Thanks Any opinion on framing for the second story? Is it more cost effective to use steel I beams instead of 2x6 stick framing?

On another note, given the current housing market, is this a good time to remodel in general. Also, are remodeling costs changing? There are several recently remodeled homes in my area. We are planning to stay in this house for at least the next several years instead of buying a home that already has a family room and master suite.

Hi rsmysore... The last consideration should be how your home will fit in with the neighborhood. You don't want to have the most valuable home in an average neighborhood... this would make selling it difficult and at a lower price.
If the completed home will end up with approximately the same size and quality of the other homes - your time and money will be well spent.
Lastly, IMHO, remodeling is always timely, assuming you do as much of the work as possible. Hiring the work done would take years to have appreciation gain back your cost of Labor.

Hello RSMysore:
Steel is considerably more expensive to use than wood construction. First you have to have a rigid steel frame to hold the weight up, then fill in with the seel studs. The rigid steel frame is the killer, its terribly expensive.
I think remodeling is always the least expensive way to go, however the market collapse is bringing new and existing house prices down sharply; in some cases even by double digits. It may pay to look around now.
The bursting bubble also puts more contractors into the remodeling business, comming from the building part. You would think that would lower the cost because of low demand but remodelers know they are probably the only bidder on most jobs and the jobs are less time consuming. It gives them the feeling of 'get the money and run'.
If you have a local Home Builder's Association you could check with them for a recommended remodeler. Make sure all contractors are bidding apples to apples, are licensed and have liability and worker's compensation insurance.
Remember, if they have an accident, fail to pay for any material, or cause any damage to your house; the 'property owner' is liable.
Near my home some roofers caused a fire that burned a $400,000 house to the ground, the owner's insurance refused liability as did the roofers. After several years, more money thrown away on lawyers and saving up more money, they finally have a new home.
Glenn

Thanks Glenn. You guys are very helpful with all kinds of information.

We bought our home about 2 years back, and the value has fallen a little bit after we bought it. So selling and buying might not be the option. The wondering about upgrading to a new bigger home is more of a thought because of what we hear about the cost of remodeling in the SF bay area market. We like the place for its proximity to work, and free ways, and its location in general, and we are sure we dont mind living here for another 10 years or more.

Talking about the cost of remodeling, what we want to do is expand into the backyard for a family room of about 450sq ft and on top of that build a master bed suite of about 450sq ft. So we are looking at adding 900sq ft. The job will include a stairs going up in the family room. It will most likely include all the wiring and such for home theatre surround sound (in family room), Hard wood floors, dual pane windows/sliding doors and such. No rework of any of the existing living area. Both the additions will be on the new foundation.

We have a couple of people coming over to give estimates this week. But from what I have read on this and other forums, it looks like the estimate is the range of 220 - 250 /sqft. There are people who say they have spent 300 - 350K for similar jobs. That was surely above my expectation. We are most likely to put off the plans for a couple of years if thats the case. But that was the reason for my questions about the timing, with the downturn of the housing market and what not. Have the costs (as quoted by GCs or sub-contractors) gone down because of all these or lack of enough work. But from what you are saying, the current housing slump doesnt necessarily mean the remodeling jobs are cheaper.

You can have a 2000sf house built for under 200k. Spending 200k on a family room and master suite is ridiculous. I would find a builder to do your addition. They would use builders grade materials which is less than half the cost. They will use a $300 sliding glass door and $150 windows. compared to $1000 and 400+. Plus they will subcontract out sections of the job to save labor costs. A contractor and his crew will want $40+ an hour for eveything they do.

The California market where you live is on the higher end than what the others are used to. I have inspectors who live in the area, those #s are close. CA has a higher rate because of all the licencing, taxes, permitting, overhead and their own codes. They are much stricter than anyone...except NYC.
Have the folks come out with the prices,then decide.
Having been a builder and re-modeler, and being a licenced home inspector...go with the re-modelers if you want a professional job done, the resale is a factor. With less expensive products you will not get it back with finicky potential clients.
Speaking from experience, builders are the number crunchers,they do not do the same job... re modelers are the ones to get for remodeling in my opinion.
You get what you pay for. Do your homework as Glenn suggested.