Key Takeaways
- Today’s home buyers are searching Zillow for remodeled homes, not fixer-uppers.
- Buyers are willing to pay $13,000 more for a move-in-ready home to avoid spending time and money renovations according to Zillow.
- Fixer-uppers are selling for 7% less than similar remodeled homes, the largest discount in three years.
Home buyers are less interested in “sweat equity” and “good bones” than a quick move-in, according to recent research.
At least this is what Zillow says its search trends suggest, according to a new report. Real estate marketplace company Zillow in a recent report said their analysis of search trends suggests that buyers are willing to pay nearly 4% more than expected, or about $13,000, for a home that is already remodeled.
Remodeled listings are saved 26% more than homes that are not remodeled, Zillow said, while turnkey homes are shared with a home shopping partner 30% more often than similar homes that aren’t remodeled—indications that those shoppers are more serious about buying.
This hasn’t always been the case, according to Zillow. A year earlier, the company said, the term “remodeled” contributed to a sale price premium of less than 1%. And before the pandemic, Zillow said, listings mentioning terms like “fixer,” “TLC” “needs work” or “good bones” were more likely to sell than those without those terms.
Fixer-upper opportunities can attract buyers looking to spend less money up front or eager to personalize a home. But others may prefer to forego the additional cost, effort and time to complete the work. Some market watchers say Americans who have been avoiding home renovations because of inflation and interest rates may soon decide they can’t put them off much longer. Indeed home-improvement retailers have been waiting for them to restart spending on big-ticket projects.
Homebuyers’ preferences may be influencing home prices, too. Fixer-uppers are now selling for 7% less than other similar homes—the largest discount in three years, according to Zillow.
“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,” said Amanda Pendleton, ZIllow’s home trend expert.