To me, a house with the garage converted into living space looks strange. I've seen some really cute houses made just plain ugly by converting the garages. It totally ruins the architecture of a house. I'd rather settle for a much smaller house than one made larger by a garage conversion. I wouldn't even move into a neighborhood with converted garages. Converted garages look tacky. In my opinion, a conversion devalues the house and the neighborhood. But, if the neighborhood is already gone downhill, converting the garage won't make a difference, one way or the other and you'd be selling to like minded people in similiar financial circumstances.