Buyers embrace a market that…needs improvement.
The general scarcity of homes for sale is forcing people to look at the market more creatively. There’s a greater appetite for risk, but there’s also more aptitude for home improvement projects. It’s a multi-layered story that involves economic forces as well as cultural shifts, but the result is that buyers are no longer afraid of homes that need extensive renovation. In many cases, they’re actively seeking them out.
- In 2021, sales of fixer uppers jumped an astonishing 13.4% from the year before. Fixer-uppers also sold faster, and for much more money (+40.8% in dollar deal volume) than they did prior to the pandemic.
- Those numbers clearly reflect the shifts in the broader market — everything is selling faster, and costing more — but they also track a change in attitudes towards home renovation led by younger buyers; 80% of millennials say they’re open to buying fixer uppers.
- Partially, that openness is driven by economics. Fixer-uppers cost 13% less than other homes, which equates to $40,000 off the price of an average home. But many younger buyers also see the home renovation process as an outlet for personal creativity — and for content creation. Home DIYers who document their projects on TikTok can garner millions of followers, and even monetize the process.
Ultimately, most buyers who go all in on fixer uppers are making a bet on the market. They’re calculating that with their time, energy and taste, they can beat the margins on their discounted home. But because many of them actually enjoy the home renovation process, the way they see it, they can’t really lose.
Read more at Bloomberg: Homebuyers Swarm to High-Risk, High-Reward Fixer-Uppers
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