SEATTLE, Aug. 31, 2016 /PRNewswire/ -- While a fixer-upper home may have an appealing price tag, the discount might not cover basic renovation costs. Fixer-upper homes list for just 8 percent less than market value, which for the median fixer-upper would save buyers only $11,000 for renovations[i], according to a new Zillow Digs® analysis[ii].
Zillow Digs analyzed nearly 70,000 listings for fixer-uppers from around the country to see how their list prices compared to their estimated values. If renovation costs exceed the home's discount, then it may be more cost-effective to buy a similar home that doesn't require renovations. Fixer-uppers were identified based on listing description keywords that signaled the home needs work, like "TLC," "good bones" and "fixer-upper."
Of all the metros analyzed, fixer-uppers in Phoenix have the smallest cash discount ($1,000 less than market value) and in turn give buyers the least financial leeway for renovations. Fixer-uppers in Atlanta and Miami also list very close to market value, saving buyers minimal cash up front.
While no two fixer-uppers are alike, buyers are more likely to find large upfront cash savings on fixer-uppers in expensive markets, where just a small percentage discount could yield quite a bit of money to spend on renovations. For example, fixer-uppers in San Francisco are discounted only 10 percent, which is lower than other metros, but still gives buyers $54,000 in upfront savings for renovations on the median home. Other metros with high cash savings include San Jose ($38,000) and Seattle ($24,000).
"Fixer-uppers can be a great deal, and they allow buyers to incorporate their personal style into a home while renovating, but it's still a good idea to do the math before making the leap," says Svenja Gudell, Zillow chief economist. "While an 8 percent discount or $11,000 in upfront savings on a fixer-upper is certainly a good chunk of change, it likely won't be enough to cover a kitchen remodel, let alone structural updates like a new roof or plumbing, which many of these properties may require."
|
Metro |
Renovation Breakeven on |
Fixer-Upper |
Prevalence of |
|
United States |
$ 11,000 |
7.6% |
1.6% |
|
New York-Northern New Jersey |
$ 12,000 |
4.4% |
2.0% |
|
Los Angeles-Long Beach-Anaheim, CA |
$ 12,000 |
2.7% |
2.7% |
|
Chicago, IL |
$ 19,000 |
13.8% |
1.7% |
|
Dallas-Fort Worth, TX |
$ 6,000 |
5.4% |
1.4% |
|
Philadelphia, PA |
$ 17,000 |
13.7% |
2.7% |
|
Houston, TX |
NA |
NA |
1.3% |
|
Washington, DC |
$ 15,000 |
5.9% |
1.8% |
|
Miami-Fort Lauderdale, FL |
$ 4,000 |
2.9% |
1.6% |
|
Atlanta, GA |
$ 4,000 |
4.9% |
1.7% |
|
Boston, MA |
$ 10,000 |
3.6% |
1.9% |
|
San Francisco, CA |
$ 54,000 |
9.5% |
2.0% |
|
Detroit, MI |
$ 6,000 |
8.7% |
1.8% |
|
Riverside, CA |
$ 3,000 |
1.2% |
2.0% |
|
Phoenix, AZ |
$ 1,000 |
0.4% |
0.9% |
|
Seattle, WA |
$ 24,000 |
8.2% |
1.7% |
|
Minneapolis-St Paul, MN |
$ 15,000 |
8.4% |
1.1% |
|
San Diego, CA |
$ 11,000 |
2.7% |
1.6% |
|
St. Louis, MO |
$ 16,000 |
16.9% |
1.6% |
|
Tampa, FL |
$ 6,000 |
5.9% |
2.6% |
|
Baltimore, MD |
$ 23,000 |
16.6% |
2.6% |
|
Denver, CO |
$ 9,000 |
3.8% |
1.3% |
|
Pittsburgh, PA |
$ 15,000 |
21.2% |
2.2% |
|
Portland, OR |
$ 19,000 |
7.3% |
2.4% |
|
Charlotte, NC |
$ 11,000 |
9.5% |
1.3% |
|
Sacramento, CA |
$ 9,000 |
4.5% |
2.3% |
|
San Antonio, TX |
NA |
NA |
1.3% |
|
Orlando, FL |
$ 7,000 |
5.6% |
2.0% |
|
Cincinnati, OH |
$ 23,000 |
25.3% |
1.8% |
|
Cleveland, OH |
$ 22,000 |
31.9% |
2.4% |
|
Las Vegas, NV |
NA |
NA |
0.7% |
|
Columbus, OH |
$ 19,000 |
18.0% |
1.9% |
|
San Jose, CA |
$ 38,000 |
6.5% |
1.5% |
|
Austin, TX |
NA |
NA |
0.9% |
|
Virginia Beach, VA |
$ 19,000 |
13.1% |
2.0% |
|
Nashville, TN |
$ 6,000 |
5.0% |
1.2% |
Zillow Digs
Zillow Digs® is a hub for home improvement and design inspiration. Users can browse millions of photos of interiors and exteriors of real homes, organized by space, style, cost and color. Product tags allow users to easily locate similar products and accessories as seen in their favorite photos, and patent-pending Digs® Estimates help people understand what it would cost to recreate the actual bathrooms and kitchens they are viewing. In addition, Zillow Digs users can collect images, share favorites and follow others for inspiration, from the Zillow Digs App for iPhone® and iPad®, or on the Web.
Zillow
Zillow® is the leading real estate and rental marketplace dedicated to empowering consumers with data, inspiration and knowledge around the place they call home, and connecting them with the best local professionals who can help. Zillow serves the full lifecycle of owning and living in a home: buying, selling, renting, financing, remodeling and more. In addition to Zillow.com®, Zillow operates the most popular suite of mobile real estate apps, with more than two dozen apps across all major platforms. Launched in 2006, Zillow is owned and operated by Zillow Group (NASDAQ: Z and ZG) and headquartered in Seattle.
Zillow and Zillow.com are registered trademarks of Zillow, Inc.
[i] Assuming the buyer pays full list price for the home.
[ii] The Zillow Digs Fixer-Upper Discount Analysis looked at nearly 70,000 'fixer-upper' listings from around the country to see how their price compared to their estimated value. The analysis looked at all of Zillow's for-sale listings from 2015 and identified fixer-upper homes based on keywords or phrases present in the listing description that signaled the home may be in need of renovations. Example words include "fixer-upper," "TLC," "needs work," and "good bones." The data was then aggregated at the metro and national levels. Any reported region had to have at least 100 fixer-uppers.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/average-fixer-upper-home-lists-for-8-percent-discount-buyers-save-only-11000-for-renovations-300320567.html
SOURCE Zillow
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