In the real estate market, the pool of buyers willing to take on fixer-uppers is shrinking. In fact, new data suggests demand for unrenovated homes has dipped by 50%.
As homes requiring substantial renovation hit the market, potential buyers, already feeling the pinch of rising mortgage rates and property prices, are reportedly opting for turnkey properties. The perceived cost and hassle of extensive renovations seemingly are deterring buyers from considering these homes, despite the potential value they could add to the property in the long term.
One telling indicator of this shift is the decreased average number of offers sellers are receiving.
According to the National Association of Realtors, sellers were in a position to field an average of roughly six offers a year ago. Now, they’re seeing nearly half that number. This shift in buyer preference is seen as one of the reasons behind the dip.
Facing the Fallout
The implications of this trend are potentially significant for sellers and buyers alike. Diminished demand for fixer-uppers could mean sellers who invest in pre-sale upgrades may find it easier to close deals — and those who don’t may find it takes far longer to sell. As for buyers, the shift may allow them to be pickier about homes in need of upgrades.
Still, in a marketplace dominated by sellers due to limited inventory, the luxury of choice might not always be an option. Ultimately, this shift serves best as a reminder that buying a home is a balancing act. Renovations, rising costs, inventory, and many more variables factor into the value of a home and the cost to own it. Only by considering them all can you find the perfect balance for you.
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