The Death of Fixer-Uppers: Homebuyers Shun Renovation Projects in Cutthroat Housing Market
In this dog-eat-dog housing market, it seems Colorado home buyers have become rather demanding. Gone are the days when they would settle for a fixer-upper.
Already burdened by exorbitant prices and interest rates that rival the trajectory of a SpaceX rocket, buyers today are not interested in investing in a property that resembles a set from an HGTV disaster show.
But with mortgage rates skyrocketing in such a short time frame, buyers' budgets have taken a hit. What was once a comfortable $1 million price point is now a distant memory as rates climb above 6%. Now, these buyers find themselves searching for homes in the much more modest range of $750,000.
Recent data from Zillow sheds light on the sad plight of fixer-uppers in this current market. Across the nation, only a measly 0.3% of sales in the first half of this year were listings that dared to mention the dreaded phrase "fixer-upper." And guess what? They sold at a 3.1% discount and languished on the market for an additional 3.2 agonizing days compared to expectations. Ouch!
On the flip side, homes that proudly boasted being "remodeled" or "renovated" accounted for a whopping 24.1% of sales in the United States. Not only did they fetch a premium sale price of 1.2%, but they also zoomed off the market 1.8 days faster than expected. It seems buyers are willing to shell out the big bucks for move-in ready properties.
As for the Denver area, "fixer-upper" listings made up a measly 0.2% of sales in the first half of 2023, according to Zillow. Meanwhile, those advertised as "remodeled" or "renovated" comprised a staggering 29.7% of sales. So much for the allure of sweat equity and DIY projects.
In this cutthroat housing market, it seems that homebuyers have become increasingly unwilling to undertake major renovations. The days of "fixer-upper fever" appear to be fading away, replaced by a craving for move-in ready properties that won't break the bank or the spirit of exhausted buyers.
Time will tell if this trend persists or if the pendulum swings back in favor of the unpolished gems waiting to be transformed by the next generation of DIY enthusiasts.