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 $11,000 in upfront savings on a fixer-upper is
certainly a good chunk of change, it likely won't be enough to
cover a kitchen remodel, let alone structural updates like a new
roof or plumbing, which many of these properties may require."
Metro
|
Renovation
Breakeven on
Median-Priced Home ($)
|
Fixer-Upper
Discount (%)
|
Prevalence of
Fixer-Uppers (%
of all listings)
|
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