Nobody Wants to Buy a Fixer-Upper Right Now
Homes that need extensive renovations are scaring off already cash-strapped buyers, real-estate agents say
3 min
They want to buy a house. They just don’t want to hire a contractor.
Real-estate agents say buyers right now seem in no mood to take on the additional costs and headaches of major renovation projects. There is no national data tracking how much quicker renovated homes sell than unrenovated ones, but there are signs of this change. It is one reason sellers are receiving an average of three offers now, compared with around six a year ago, according to the National Association of Realtors.
The drop in demand for unrenovated homes is mostly driven by high mortgage rates, buyers and their agents said. Fixer-uppers are always a risky proposition for buyers, but now they are more costly as the rates for home loans and construction loans have both increased, on top of high property prices.
This push higher in rates has widened the gap in sale time between turnkey and non-renovated properties, say agents. For sellers, this means a home in need of repair often sits on the market longer unless they attempt to do more work before listing.
The appetite for renovations is lower both for those shopping for their main property and second homes, say agents.
Tommy Byrd, 72 years old, looked at about a dozen unrenovated homes in his hunt for a vacation house in Santa Rosa Beach, Fla. He recently decided to limit his search to only renovated homes as he doesn’t want to manage the renovation from another state.
“I’d prefer to purchase a turnkey property,” he said.
Sellers can also no longer count on a frenzy of offers from buyers willing to waive inspections on properties in need of repairs, said Lawrence Yun, National Association of Realtors chief economist. In New York City, fixer-uppers are generally sitting on the market for longer, said Benjamin Dixon, a real-estate agent there.
This means buyers can usually be choosier about homes that need upgrades, such as new hardwood floors, kitchens, bathrooms or even a fresh coat of paint, Yun said.
When Bob Evans, 66, put his two-bedroom Guilford, Conn., condominium on the market last spring, he figured a couple looking for a starter home would look past the dated décor and jump at the roughly $200,000 asking price.
In the five months or so it was on the market, about 60 people toured the 1,400-square-foot home that had carpeting and dark wood kitchen cabinets. Not one made an offer.
“They just couldn’t get past the ’80s-style décor, I guess,” he said.
Evans is spending about $20,000 to remodel the unit himself, gradually making upgrades such as removing the carpet to show the original wood floors. He plans to relist the condo later this year for about $250,000.
Anything that sits on the market for more than a month is usually either overpriced or in need of significant repairs or updates, said Taylor Marr, Redfin’s deputy chief economist. Homes stay on the market for a median of 27 days, up from 19 days a year ago, according to Redfin.
“Most home buyers right now simply don’t have enough money left over to invest in major repairs or remodelling,” said Marr.
Meg Jordan, 32, and her husband, Rob Boll, 34, initially thought they’d buy a fixer-upper. Starting last fall, they looked at nearly 30 homes, six of which needed complete remodelling.
They started to get second thoughts about buying a home that needed significant renovation as they were worried about surprise work, rising costs and higher interest rates.
The couple is in contract on a roughly $1.8 million home in East Hampton, N.Y., and are set to close in a few weeks. Before move-in, the house is getting a fresh coat of interior paint and then they plan to enjoy their first summer as homeowners near the beach.
“We’ll paint it, move in, and enjoy it,” said Jordan.
The decline in home buyers wishing to renovate hasn’t put a dent in overall spending on remodelling. In fact, the market for homeowner improvement and repair projects in the U.S. is projected to reach $484 billion in 2023, up from $471 billion last year and $328 billion in 2019, according to Harvard University’s Joint Center for Housing Studies.
The people willing to take on these projects are often existing homeowners who want to upgrade their house without giving up their ultra low mortgage interest rate, real-estate agents and economists said.
In some real-estate markets, so few homes are for sale that buyers may have little choice but to purchase one that needs work, real-estate agents said. In other areas, bidding wars remain common and buyers can still get top dollar for unrenovated houses—it just may take longer.
“Even homes that need renovations are still selling near list price or slightly higher simply because there aren’t enough homes on the market to meet demand,” said Brian Slater, a Realtor in Phoenixville, Pa.
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Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
A new AI-driven account by leading landscape architect Jon Hazelwood pushes the boundaries on the role of ‘complex nature’ in the future of our cities
2 min
Drifts of ground cover plants and wildflowers along the steps of the Sydney Opera House, traffic obscured by meadow-like planting and kangaroos pausing on city streets.
This is the way our cities could be, as imagined by landscape architect Jon Hazelwood, principal at multi-disciplinary architectural firm Hassell. He has been exploring the possibilities of rewilding urban spaces using AI for his Instagram account, Naturopolis_ai with visually arresting outcomes.
“It took me a few weeks to get interesting results,” he said. “I really like the ephemeral nature of the images — you will never see it again and none of those plants are real.
“The AI engine makes an approximation of a grevillea.”
Hazelwood chose some of the most iconic locations in Australia, including the Sydney Opera House and the Harbour Bridge, as well as international cities such as Paris and London, to demonstrate the impact of untamed green spaces on streetscapes, plazas and public space.
He said he hopes to provoke a conversation about the artificial separation between our cities and the broader environment, exploring ways to break down the barriers and promote biodiversity.
“A lot of the planning (for public spaces) is very limited,” Hazelwood said. “There are 110,000 species of plants in Australia and we probably use about 12 in our (public) planting schemes.
“Often it’s for practical reasons because they’re tough and drought tolerant — but it’s not the whole story.”
Hazelwood pointed to the work of UK landscape architect Prof Nigel Dunnett, who has championed wild garden design in urban spaces. He has drawn interest in recent years for his work transforming the brutalist apartment block at the Barbican in London into a meadow-like environment with diverse plantings of grasses and perennials.
Hazelwood said it is this kind of ‘complex nature’ that is required for cities to thrive into the future, but it can be hard to convince planners and developers of the benefits.
“We have been doing a lot of work on how we get complex nature because complexity of species drives biodiversity,” he said.
“But when we try to propose the space the questions are: how are we going to maintain it? Where is the lawn?
“A lot of our work is demonstrating you can get those things and still provide a complex environment.”
At the moment, Hassell together with the University of Melbourne is trialling options at the Hills Showground Metro Station in Sydney, where the remaining ground level planting has been replaced with more than 100 different species of plants and flowers to encourage diversity without the need for regular maintenance. But more needs to be done, Hazelwood said.
“It needs bottom-up change,” he said. ““There is work being done at government level around nature positive cities, but equally there needs to be changes in the range of plants that nurseries grow, and in the way our city landscapes are maintained and managed.”
And there’s no AI option for that.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
