location...

Virginia

You will get better comfort and humidity control with a two stage. This is decision you will need to make based on comfort versus cost difference. I personally see nothing wrong with the single stage. However, I would insist on the correct thermostat that will allow for dehumidify on demand setup in summertime cooling.

IMO

If your bedrooms are upstairs, I would definitely get a 2 stage system with variable speed air handler. Nothing worse than a blast of air in the middle of the night when a single speed HVAC kicks in at full RPM!!!

the idea of a "blast of air in the middle of night" is completely erroneous. No blast at all with the var speed air handler not to mention little to no noise assuming good ductwork. Now a conventional low end PSC blower motor would be a different matter...

IMO

Is the second floor air handler in the attic? Is that the reason for a heat pump and not a gas furnace?

How big is the second floor and what size is being proposed? A 2-stage condenser may not have much of an advantage for a 2 ton size, but it will for 3 ton or larger. I would also spend the money on a 2-stage variable speed equipment if your old system was not able to keep the humidity below 50% in the summer. In my opinion it is worth the extra cost.

Yes, 2nd floor air handler is in the attic. 2nd floor is around 1800sqft (but large chuck of that is open space about the family room and foyer). The air intake for 2nd fl unit is just in this big open hallway area.

The original unit (Trane XE1000) is 2.5 ton, and we are being recommended the same size. The 2-stage one (XR17), it doesn't come in 1/2 sizes, so we'd do a 3 ton in that case. For any of the siingle-stage ones (XR14, XR15, XR16) we are being quoted 2.5 ton.

It sounds like contractor is doubtful that we'd notice much of a difference using a 2-stage. If that is the case, then I would probably just go for the cheapest XR14 with var speed air handler. I am willing to spend the extra, if I would really notice a difference, then maybe its worth the extra +44% to go to XL17. But that's a big jump in price if there is negligible difference.

Because we have such a big open area which combines with downstairs air -- will I notice a difference? I can't recall the AC not being able to keep up.

The one thing that does annoy me about this design, is that the thermostat is out in the "open" area. So in the winter, if we turn down the heat downstairs, and people close their bedroom doors, then the thermostat ends up being much cooler than the rooms, and temps are all uneven. I think that is a different problem, and not affected at all by which unit I pick.

A extra 44% does not seem right. Can you post the models and prices of the two systems you have been quoted? Perhaps there is an model in between what you have been quoted. Are you going to get additional quotes to determine if the pricing is competitive in your area?

Yeah, will be shopping quotes, once I determine which model to go with.

Sorry, above I used XL... should be XR model. All are Trane models.

XR14: $5800 (2.5 ton)

XR15: $6300 (2.5 ton)

XR16: $7000 (2.5 ton)

XR17: $8400 (3 ton)

I am currently thinking, I'd do either the XR14 or XR17 (and only if the 2 stage makes a noticable difference). Otherwise, save the upfront $$ on single stage. My understanding is the major diff between XR14, 15, 16 would be the SEER rating, therefore some $ monthly savings. Or am I missing some other point for considering XR15/16?

Are any rebates being offered from either Trane or the local utility company. Higher end models tend to have bigger rebates. Local utilities encourage higher SEER ratings with rebates or credits. These deductions help close the gap between the low end and top end models.

No, I've checked for rebates -- none are available at this time.

I would not pay that much for the difference. The variable speed air handler has a profile whereby it starts out slow for humidity removal, then speeds up for temperature control. This profile is a large 'half-step' in going toward 2-stage operation.

regardless of whether sgl or two stage, get the correct thermostat and have dealer set up for independent dehumidify on demand feature....824 Trane thermostat...

Do some of these 3rd party thermostats do the same thing?

Something like this: https://www.amazon.com/Honeywell-TH9320WF5003-Color-Touchscreen-Thermostat/dp/B00G4CIG7M

"The idea of a "blast of air in the middle of night" is completely erroneous. No blast at all with the var speed air handler not to mention little to no noise assuming good ductwork. Now a conventional low end PSC blower motor would be a different matter... "

If you read my post carefully, you would realize that's exactly what I was saying. As fixed speed PSC motor turns on at full blast. A variable speed motor ramps up slowly and when combined with a 2 stage sytem is way more comfortable than any single speed, ductwork notwithstanding.

"The variable speed air handler has a profile whereby it starts out slow for humidity removal, then speeds up for temperature control."

Well, the variable speed air handle ramps up over about 2 minutes, regardless of humidity. The humidity setting in the thermostat drops the motor RPM by 10%-15% to slow down air movement over the evaporator coil, thereby removing more moisture.