We sold a property last year which was a 3BR, 1BA townhome which we advised the Seller would sell better if she added a 2nd bath. There was ample space for the bath by subdividing a laundry/mechanical room on the lower level (next to the 3rd BR).
After marketing for a few months without interest from Buyers as a 3-1, the property sold quite quickly as a 3-2. The added bath cost $4700 (total) - this was a substantial sum for the Seller, but did make the home marketable and appealing to a wider group of Buyers. If the property had lingered on the market, the next price reduction would likely have been in excess of the $4700 spent on the bath.
Please get a CMA from a local Realtor for your pricing. The added bath will make your property more marketable - many Buyers won't even scan MLS data for anything less than 2 baths. This could leave your property out in the cold, regardless of its appeal.