We have been house hunting for approximately 6 months and we are deadlocked between 2 houses. Both are in the same area, within 2 blocks of each other, so it would be the same commute, same schools, same distance from the park (1/2 block!). We brought in a contractor to look at both houses so we know what's possible and what it would cost.
The house I want is smaller (1500 sq feet), but on a very quiet, street with a lot of young families. The yard is smaller and the house has only the basics of what we are looking for - 3 br, 1 full bath (but we can add a master bath easily). No family room, but we can also easily convert the attached garage (we never park in the garage and we wouldn't for this house either. Plenty of street parking available).
The house DH wants is 1 house away from the corner of a busy intersection. the street the house is on is less busy, but the cross street is fairly busy with the traffic light being right at that corner. There is no street parking in front of that house and no sidewalks. But, it's about 400-500 sq feet bigger (about 1900 sq feet), has a bigger yard, a sun room and finished basement. Also 3 br, but with 1.5 bath with possibilities of adding another full bath. Because this house is on the same block as the park, there are actually only 2 neighbors, one to either side of us, so there's less of a community feel. The house is set back away from the street, so I didn't hear any traffic noise at all.
In terms of price, if we got both houses at the price we would like and did all the renovations, it would still be about 30K cheaper for the smaller house on the quiet street because of the size difference. For reference, we currently live in a 1200 sq feet twin home and feel like the size is adequate for the 4 of us. We just hate our adjoining neighbors who say they will not move for some time. It does get tight when the grandparents visit for the weekend, which happens about every other month, so not that frequently. Most of the houses in our price range are about 1400-2000 sq feet, with the bigger ones being at the very top of our price range. But we absolutely want to stay in this area because of proximity to work and the fantastic schools.
(I wonder how much of the size preference is based on how we grew up. I grew up in a 2000+ sq foot home and feel like it was too much room for my family of 4. There were rooms that we never ever used and we spent all day Saturdays cleaning the house. DH grew up in a very small house, probably less than 1400 sq feet for a family of 5 and I guess he always wanted a bigger house).
Re: NBR: Which house would you choose? (long)
I'm of the belief that you can change the house but not the location so I would go with the smaller house. Like you said, you can easily add the things you need.
With two young children, I would not want to be near a busy street. The "community feel" would be a less compelling argument because the neighbors can change but it's still a valid point.