WRE NEWS
Listing a home as a fixer-upper may not be a profitable idea anymore, as a new analysis by Zillow (NASDAQ: Z, ZG) found buyers were willing to pay 3.7% more than expected for a home that is already remodeled – which is an additional $13,194 on a typical home and is also the highest sale price premium of all 359 listing keywords Zillow analyzed across more than 2 million homes listed for sale in 2024.
Zillow found that remodeled listings on its platform generated 26% more daily saves and are shared with a shopping partner 30% more often than similar homes that are not remodeled. Today, 28% of all for-sale listings on Zillow are now described as “renovated.”
In comparison, pre-pandemic listings that mentioned “fixer,” “TLC,” “needs work” or “good bones” were more likely to sell than listings without those terms. But in the current market, Zillow research found a “fixer-upper” sells for 7.3% less than a similar home, the largest discount in three years, while a home that “needs work” or “TLC” sells for around 8% less than expected – which adds up to more than $28,000 on a typical home, a meaningful deal on the purchase price. Zillow attributed this to the rising costs of renovations.
“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.”