Sep 16, 2023 - Real Estate

Denver buyers don't want your fixer-upper

Illustration of two hammers forming an "X" shape.

Illustration: Maura Losch/Axios

In this housing market, Denver buyers aren't going to settle for homes requiring major renovations.

Why it matters: Homebuyers already hampered by gravity-defying prices and mortgage rates don't want to spring for someplace that looks like an HGTV "before" photo.

What's happening: With mortgage rates doubling in such a short time period, buyers' budgets have shrunk significantly, agent David DiPetro tells Axios.

  • When rates were at 3%, a buyer might have been looking at a $1 million price point. Now, with rates above 6%, their budget is closer to $750,000.
  • They're going to be pickier because their budget doesn't get them as much house as it did 18 months ago, DiPetro explains.

What they're saying: To get your house ready for market, Compass agent Kelly Moye recommends spending the bulk of your budget on the kitchen, baths and landscaping.

  • "If the kitchens and baths shine, people tend to look over other outdated features," Moye says.

Be smart: DiPetro has a few tips for how and where to invest your reno budget.

🏡 Revamp the exterior. Paint your house and do some light landscaping to get buyers in the door.

🚰 Update appliances. A full kitchen reno can cost a pretty penny ($30,000-$50,000). Instead, invest in modern appliances to win over buyers at a fraction of the cost.

💡Lighting. No one likes poor, yellow lighting. Replace your old bulbs with brighter LED lights.

The big picture: Self-identified fixer-uppers are typically selling for less, and more slowly, than expected, according to Zillow data shared with Axios.

  • Across the U.S., listings that mention the phrase — just 0.3% of sales in the first half of the year — sold at a 3.1% discount and took 3.2 days longer to sell relative to expectations, the data shows.
  • Listings pegged as "remodeled" or "renovated," which accounted for 24.1% of U.S. sales, sold at a 1.2% premium and 1.8 days faster than expected.

Zoom in: Listings that mention "fixer-upper" comprised 0.2% of Denver-area sales in the first half of 2023, per the Zillow data, while those advertised as "remodeled" or "renovated" made up 29.7%.

"Most homebuyers right now simply don't have enough money left over to invest in major repairs or remodeling," Redfin deputy chief economist Taylor Marr tells The Wall Street Journal.

Data: Redfin; Note: Metro divisions are subdivisions of metropolitan areas; Chart: Axios Visuals

By the numbers: Roughly 51% of Denver-area homes in July were snapped up in two weeks or less, according to Redfin data shared with Axios.

Zoom out: Nationwide, around 41% of listings were marked pending, contingent or sold within that window, Redfin found.

State of play: Houses that stay on the market for more than a month are usually overpriced or in need of major work, according to Redfin's Taylor Marr.

  • Denver homes go off-market after a median of 12 days, compared to eight days a year ago, per the real estate brokerage.
  • This green-carpeted University Hills home is described as "great candidate for a remodel" or tear down. It's listed at $1.35 million and has been on the market for a whopping 410-plus days.
  • A $3 million home in Washington Park that's "ready for a creative transformation" has been on the market for more than 185 days.

Go deeper: Americans' homes are worth more than ever, but tapping into that value isn't easy


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