Thanks to rising home prices and increasing competition, inventories around the country are tight. As a result, the competitive advantage has turned toward the humble fixer-upper.
Zillow reported that the current competitive environment in housing may be giving sellers more flexibility to list their homes for sale “as-is” without needing to fix them up first. According to the firm, there are 12 percent more homes on the market now than five years ago that have listings with phrases like “fixer-upper,” “TLC” and “needs work.”
That percentage is even higher in hot markets more expensive homes. Nationally, fixer-uppers priced within the top third of their markets saw the biggest surge in inventory over the last five years, rising nearly 35 percent, Zillow reported. Conversely, affordably priced fixer-uppers, or those valued within the bottom tier, increased less than 3 percent.
In some hot markets, like Seattle standard for-sale inventory has decreased 10 percent over the past five years, even as fixer-upper listings increased 33 percent over the same time period. The age of the typical home sold has also nearly doubled. In 2006, homes were typically 15 years old when sold. By the end of 2015 the median age was 28.
Somewhat an anomaly was Baltimore. Baltimore is not usually considered a hot market and has a lot of lower-priced inventory, yet the city topped Zillow’s list of markets where the percentage of fixer-uppers has increased since 2011‒‒110 percent. Portland was a close second, with a 106 percent increase. At the other end, Sacramento saw a 46 percent decrease in fixer-upper listings.
“Across the country, homes are selling fast and for high prices,” said Svenja Gudell, Zillow's chief economist. “Sellers are in the driver's seat, with the freedom to list their home for sale ‘as-is’ without worrying about price cuts or the home sitting on the market. And without sufficient new construction the housing stock has aged, so home buyers are finding more and more homes on the market in need of a little TLC.”