Zillow research finds fixer-uppers are selling
for the largest discount in years as buyers seek out move-in-ready
properties
- Buyers pay 3.7% more than expected for remodeled homes.
- Remodeled homes get 26% more daily saves and 30% more daily
shares on Zillow than similar homes.
- Fixer-uppers sell for 7.3% less than other similar homes, the
largest discount in three years.
SEATTLE, Feb. 19,
2025 /PRNewswire/ -- Sorry, Chip and Jo, home
buyers are no longer flocking to fixer-uppers. A new
Zillow® analysis finds buyers are willing to pay nearly
4% more than expected for a home that is already remodeled (3.7%) —
or an additional $13,194 on a typical
U.S. home. That's the highest sale price premium of all 359 listing
keywords Zillow analyzed across more than 2 million homes listed
for sale in 2024.
Remodeled listings on Zillow get 26% more daily saves and are
shared with a shopping partner 30% more often than similar homes
that are not remodeled1. These metrics of demand suggest
shoppers are more serious about these listings, and more likely to
take the next steps in the home-buying process.
It might seem intuitive that remodeled homes would sell for
more, but that hasn't always been the case. Last year's analysis of
listing keywords found the term "remodeled" only contributed to a
0.8% sale price premium. And prior to the pandemic, Zillow research
found listings that mentioned "fixer," "TLC," "needs work" or "good
bones" were more likely to sell than listings without those
terms.
"Fixer-uppers can be appealing to a first-time buyer trying to
get their foot in the door of homeownership because they offer a
lower initial price of entry," said Amanda
Pendleton, Zillow's home trends expert. "However, buyers who
are already stretching their budget to afford a home in today's
market may not be willing or able to spend more on renovations or
repairs. A remodeled home may come with a higher price tag, but a
buyer would get to spread that additional cost over the course of a
30-year mortgage versus paying cash upfront to make similar
upgrades themselves."
Once the bargain basement of the housing market, fixer-uppers
are increasingly becoming an option reserved for cash-flush buyers
who want to customize every inch of their space. Zillow research
finds a "fixer-upper" sells for 7.3% less than a similar home, the
largest discount in three years. A home that "needs work" or "TLC"
sells for around 8% less than expected. That adds up to more than
$28,000 on a typical U.S. home, a
meaningful deal on the purchase price. But add in the rising costs
of renovations, which have climbed with inflation and high interest
rates, and those cost savings can quickly vanish.
America's love affair with the fixer-upper began in the
mid-2010s. As home prices recovered from the Great Recession and
began to rapidly increase, first-time millennial buyers sought out
more affordable options, choosing homes that needed work rather
than move-in-ready properties. Dramatic before-and-after renovation
TV shows and the DIY movement took off, inspiring many others to
take on their own fixer-upper. Skyrocketing home values meant that
homeowners could afford a few mishaps or budget overruns and still
see huge equity gains while their homes were appreciating so
rapidly.
Home value appreciation has since come back down to earth. In
2024, homes nationwide appreciated 2.6%, and Zillow is forecasting
2.9% home value growth in 2025. As buyers begin to gain the upper
hand in more parts of the country, sellers can no longer be assured
that a costly gut renovation is an investment that will quickly pay
off.
Nearly 30% of all for-sale listings on Zillow are now described
as "renovated" (28%). This comes after the pandemic ignited a
renovation boom, fueled by the rise of remote work, the
unprecedented growth in home equity and an aging housing stock.
These newly renovated homes are now beginning to hit the market,
just in time for eager buyers looking for move-in-ready properties
during the spring home shopping
season.
About Zillow Group
Zillow Group, Inc. (Nasdaq: Z and
ZG) is reimagining real estate to make home a reality for more and
more people. As the most visited real estate website in
the United States, Zillow and its
affiliates help people find and get the home they want by
connecting them with digital solutions, dedicated partners and
agents, and easier buying, selling, financing, and renting
experiences.
Zillow Group's affiliates, subsidiaries and brands include
Zillow®, Zillow Premier Agent®, Zillow Home
Loans℠, Zillow Rentals®, Trulia®, Out
East®, StreetEasy®, HotPads®,
ShowingTime+℠, Spruce®, and Follow Up
Boss®.
All marks herein are owned by MFTB Holdco, Inc., a Zillow
affiliate. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS
#10287 (www.nmlsconsumeraccess.org). © 2024 MFTB Holdco, Inc., a
Zillow affiliate.
1 According to a previous analysis of homes listed
for sale on Zillow between June 2023
and May 2024. For more information on
methodology, please contact press@zillow.com.
View original
content:https://www.prnewswire.com/news-releases/the-end-of-the-fixer-upper-remodeled-homes-sell-for-the-highest-premiums-302379387.html
SOURCE Zillow Group, Inc.
