New research shows buyers want a home in move-in condition
of ConsumerAffairsSince the height of the pandemic, it was very easy to sell a home. Buyers competed for the smaller inventory of available homes and were often willing to overlook blemishes.
But according to a study from real estate marketplace Zillow, the days of getting a full-price offer on a fixer-upper are over.
The study found that buyers are willing to pay a premium of 3.7% more than expected for homes that have already been remodeled, translating to an additional $13,194 on a typical U.S. home. This marks the highest sale price premium among 359 listing keywords analyzed by Zillow across over two million homes listed for sale in 2024.
The demand for remodeled homes is evident in online engagement metrics, with such listings receiving 26% more daily saves and being shared 30% more often with shopping partners, compared to similar homes that have not been remodeled. These indicators suggest that buyers are more serious about these properties and are likely to proceed further in the home-buying process.
TLC doesnt cut it anymore
Historically, the appeal of remodeled homes wasn't as pronounced. Last year, the term "remodeled" only contributed to a 0.8% sale price premium. Before the pandemic, homes described with terms like "fixer," "TLC," "needs work," or "good bones" were more likely to attract buyers than those without such descriptors.
"Fixer-uppers can be appealing to first-time buyers trying to enter the housing market due to their lower initial price," Amanda Pendleton, Zillow's home trends expert, said in a press release.
"However, in today's market, buyers who are already stretching their budgets may not have the means to invest in renovations or repairs. A remodeled home, while more expensive upfront, allows buyers to spread the additional cost over a 30-year mortgage, avoiding the need for immediate cash outlays for upgrades."
Biggest discount in three years
Despite their previous popularity, fixer-uppers are now selling for 7.3% less than similar homes, marking the largest discount in three years. Homes needing work, or "TLC," sell for about 8% less than expected, equating to over $28,000 in savings on a typical U.S. home. However, the rising costs of renovations, driven by inflation and high interest rates, can quickly erode these savings.
The trend of purchasing fixer-uppers gained momentum in the mid-2010s as home prices recovered from the Great Recession. First-time millennial buyers sought affordable options, often choosing homes requiring work over move-in-ready properties.
The popularity of renovation TV shows and the DIY movement further fueled this trend. However, with home value appreciation stabilizing2.6% in 2024 and a forecasted 2.9% in 2025buyers are now favoring the certainty and convenience of remodeled homes.
Currently, nearly 30% of all for-sale listings on Zillow are described as "renovated." This follows a pandemic-driven renovation boom, spurred by remote work, increased home equity, and an aging housing stock. These newly renovated homes are entering the market just in time for the spring home shopping season, catering to buyers eager for move-in-ready properties.
Posted: 2025-02-20 12:53:49
