With home prices surging and inventory scant, many buyers are beginning to accept that they may not find a move-in-ready property. More than half of prospective home buyers say they’d consider purchasing a fixer-upper, whether it needs a small cosmetic lift or large structural updates, according to a new RE/MAX survey. Further, 80% say they may adjust their homebuying plans in the next year, whether that means reconsidering the type of home they purchase, getting more creative with financing—such as borrowing money from family—or even co-buying with others, the survey shows.
“Affordability remains a key concern for home buyers as home prices, interest rates and inventory continue to fluctuate,” says RE/MAX President and CEO Nick Bailey. “Despite today’s economic environment, it’s clear that homeownership is still a priority for many, and the results of our survey prove that buyers are willing to go outside their comfort zone to reach their goal.”
Indeed, 73% of respondents surveyed indicated they’d consider purchasing a fixer-upper because of the potential for a lower listing price, the RE/MAX survey shows. A majority of respondents say they’d likely spend less than $70,000 on repairs and renovations; 10% say they’d be willing to spend up to $90,000.
A fixer-upper can be significantly cheaper to buy than a move-in-ready home, but buyers need to budget for the cost of renovations. Real estate professionals can show their value by helping clients choose projects based on potential ROI.
Where to Find a Fixer-Upper?
Frontdoor, a home repair and maintenance resource, recently identified the best markets to find fixer-uppers at the lowest cost and resell them for a premium after renovation. Frontdoor scoured listings identified as “renovated” or “fixer-upper” and ranked cities based on the difference in average price between the two.
The study finds that the city with the most fixer-uppers available is New Orleans, the study. Nine percent of homes listed in New Orleans are labeled “fixer-uppers.” They cost about 45% less than homes that aren’t listed as fixer-uppers, the study notes.
Cities with an older housing stock, such as Cleveland, tend to have more homes in need of rehabilitation, the study finds. In Cleveland, the typical home is 84 years old, nearly twice the national median. Therefore, fixer-uppers comprise a higher percentage of listings there. The Frontdoor study identifies the following locations as having the most fixer-uppers on the market:
- New Orleans
- Albany, N.Y.
- Memphis, Tenn.
- Newark, N.J.
- Anchorage, Alaska
- Aurora, Colo.
- Dover, Del.