The Shift in Real Estate: Buyers Favor Remodeled Homes Over Fixer-Uppers
In a significant shift reflecting changing attitudes in the real estate market, a recent analysis by Zillow reveals that home buyers are favoring remodeled properties over traditional fixer-uppers. According to the data, buyers are willing to pay nearly 4% more, equating to an increase of approximately $13,194 on the average listing in the U.S., for homes that have undergone renovations. This contrasts markedly with past trends where fixer-uppers often held appeal due to their lower initial prices. A remodeled home’s sale price premium now sits at 3.7%, the largest observed across 359 keywords analyzed in more than two million homes listed for sale throughout 2024.
The Zillow report further highlights that remodeled listings are considerably more attractive to potential buyers. Such homes receive 26% more daily saves and are shared with accompanying partners 30% more frequently than similar homes in their original condition. This uptick in interest indicates a more serious intent among prospective buyers geared towards moving into a home that requires little to no immediate renovation. In contrast, fixer-uppers have now seen their pricing dynamics change, selling at a 7.3% discount compared to similar properties, marking the largest decrease in three years. Homes labeled as needing work or in need of TLC (tender loving care) fall short by around 8%, translating to substantial savings initially, but those savings may vanish amid rising renovation costs due to inflation and higher interest rates.
This pivot away from fixer-uppers comes as buyers grapple with budget constraints in a market where home prices have escalated. Zillow's home trends expert, Amanda Pendleton, noted that while fixer-uppers used to appeal to first-time buyers looking for cost-effective entry points into homeownership, this demographic is increasingly wary of additional unbudgeted renovation expenses. Instead, purchasers nowadays seek out remodeled dwellings, allowing them to disperse renovation costs over the tenure of a standard 30-year mortgage, rather than needing to fund potentially pricey upfront enhancements.
The trend towards remodeled homes started to gather momentum around the mid-2010s as millennials began entering the housing market, opting for homes requiring work rather than fully renovated options to secure lower prices. Influenced by popular before-and-after renovation shows and the Do-It-Yourself (DIY) movement, many were inspired to tackle their own home improvement projects. This healthy appetite for renovations was bolstered by rising home values, enabling owners to weather budget overruns while still reaping solid equity gains as homes appreciated swiftly.
However, the trajectory of home value appreciation has tempered since then. In 2024, Zillow reports a mere 2.6% appreciation in home values, with projections of 2.9% growth for 2025. As buyers regain leverage in various markets, the allure of extensive renovations—once assured to provide quick financial returns—has diminished.
Currently, around 28% of homes listed on Zillow are described as remodeled, a figure that has rapidly increased as the pandemic ignited a wave of renovations driven by a leap in home equity and a surge in remote work. As a result, fresh remodels are hitting the market just as buyers hungry for move-in-ready options gear up for the busy spring home shopping season. In this ever-evolving housing landscape, the lesson is clear: while fixer-uppers once enjoyed popularity, today's market favors the convenience of homes ready for immediate occupation, reflecting broader consumer trends in real estate.
The Zillow report further highlights that remodeled listings are considerably more attractive to potential buyers. Such homes receive 26% more daily saves and are shared with accompanying partners 30% more frequently than similar homes in their original condition. This uptick in interest indicates a more serious intent among prospective buyers geared towards moving into a home that requires little to no immediate renovation. In contrast, fixer-uppers have now seen their pricing dynamics change, selling at a 7.3% discount compared to similar properties, marking the largest decrease in three years. Homes labeled as needing work or in need of TLC (tender loving care) fall short by around 8%, translating to substantial savings initially, but those savings may vanish amid rising renovation costs due to inflation and higher interest rates.
This pivot away from fixer-uppers comes as buyers grapple with budget constraints in a market where home prices have escalated. Zillow's home trends expert, Amanda Pendleton, noted that while fixer-uppers used to appeal to first-time buyers looking for cost-effective entry points into homeownership, this demographic is increasingly wary of additional unbudgeted renovation expenses. Instead, purchasers nowadays seek out remodeled dwellings, allowing them to disperse renovation costs over the tenure of a standard 30-year mortgage, rather than needing to fund potentially pricey upfront enhancements.
The trend towards remodeled homes started to gather momentum around the mid-2010s as millennials began entering the housing market, opting for homes requiring work rather than fully renovated options to secure lower prices. Influenced by popular before-and-after renovation shows and the Do-It-Yourself (DIY) movement, many were inspired to tackle their own home improvement projects. This healthy appetite for renovations was bolstered by rising home values, enabling owners to weather budget overruns while still reaping solid equity gains as homes appreciated swiftly.
However, the trajectory of home value appreciation has tempered since then. In 2024, Zillow reports a mere 2.6% appreciation in home values, with projections of 2.9% growth for 2025. As buyers regain leverage in various markets, the allure of extensive renovations—once assured to provide quick financial returns—has diminished.
Currently, around 28% of homes listed on Zillow are described as remodeled, a figure that has rapidly increased as the pandemic ignited a wave of renovations driven by a leap in home equity and a surge in remote work. As a result, fresh remodels are hitting the market just as buyers hungry for move-in-ready options gear up for the busy spring home shopping season. In this ever-evolving housing landscape, the lesson is clear: while fixer-uppers once enjoyed popularity, today's market favors the convenience of homes ready for immediate occupation, reflecting broader consumer trends in real estate.
Topics Consumer Products & Retail）
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