According to a new survey from Move.com, the wave of first-time home buyers hitting the market has resulted in an interesting statistic. Nearly 60% of buyers searching for a home this spring are willing to consider buying a fixer-upper, with 95% believing that the projects needed will increase their new home’s value!
Realtor.com’s Chief Economist, Danielle Hale, pointed to low-inventory at the entry-level price range for the increase in willingness to renovate.
“The combination of rising home prices and limited entry-level homes for sale is prompting many home shoppers to consider homes that need renovating.
Replete with inspiration at their fingertips – like Pinterest, Instagram, and various home renovation TV shows – some home shoppers are comfortable tackling home renovation jobs to find a home that balances their needs with their budget.”
Just over half of all respondents, who said they would be willing to buy a home in need of some TLC, would also spend more $20,000 to make the home fit their needs.
The most common ‘expected’ renovation is a kitchen remodel which can run anywhere from $22,000 for a minor remodel to $66,000 for a major changes.
This isn’t a new trend by any means. According to the Joint Center for Housing Studies at Harvard University, home improvement project spending reached a new high in 2018.
“Americans spent $336.9 billion on remodeling projects, up 7.4% from the $313.6 billion a year earlier.”
Home renovation shows have given many buyers hope that they can renovate a home that’s in their budget into their dream home.
But, it’s important to remember that reno projects aren’t always as easy to accomplish as they appear on TV. The amount of work and time needed to complete a job is compressed to fit a 30 minute or hour long show. Program hosts and their on screen crew are supplemented by behind the scenes workers with support from manufacturers, who are often paying for product placements.
While houses that need a little work are a good option for first time buyers, be sure that you can do it yourself, if that’s your plan.
If you can’t, be open to other options, including hiring professionals. Don’t depend on Uncle Bob who “knows a little something” about installing kitchen cabinets to help you.
A simple reason for tight housing supply
There’s been a lot written about the reasons behind the recent limited housing supply. One very simple answer that’s revealed in the National Association of Realtors Seller Traffic Index is people are staying in their homes longer.
According to the study, tenure length (the number of years someone owns a home before moving again) has increased. From 1985 – 2008, the average time spent in a home was six years. Since then, that figure has increased to 9.5 years!
(Then there are people like us. We’ve been in our home for nearly 25 years!)
Why the change? Falling prices during the housing crisis led to many homeowners having negative equity. Some, who haven’t spoken with a real estate professional in years, don’t realize that their situation has turned around, in some cases significantly.
Others simply have low mortgage rates and don’t believe it makes sense to sell, even though they could do quite well.
Also, many older homeowners have concluded that they can be comfortable in their current houses with few changes, if any, and have decided to age in place, while taking extended vacations in warmer climates.
Nonetheless, the current inventory status makes marketing your home a good idea, especially if you understand the options.
We’d be happy to meet with you to discuss whether this is the right time for you to make a move. Please contact us via the comment section or by calling 508-568-8191. We look forward to meeting with you.
Our favorite real estate cartoon from last week.
We’d be happy to put a “sole” sign in front of your dream home. (Thanks to Jim Golden from Rose and Womble Realty Co. in Virginia Beach.)
Enjoy your week…
Mari and Hank