Sep 16, 2023 - Real Estate

D.C. buyers don't want your fixer-upper

Illustration of two hammers forming an "X" shape.

Illustration: Maura Losch/Axios

D.C. sellers need to price their homes appropriately if they want buyers to bite — especially if the house needs work, DMV-based broker Lindsay Dreyer says.

Why it matters: Homebuyers already burdened by gravity-defying prices and mortgage rates don't want to move into an HGTV "before" photo.

What's happening: In Washington, there are two categories of fixer-uppers: "Total gut jobs" and "dated but livable fixer-uppers," which typically appeal to investors and traditional buyers, respectively, Dreyer tells Axios.

  • With multiple unfinished spaces, a dated kitchen and dirty floors, this $600K Anacostia listing is described as "a perfect template for the investor."
  • Another investment opportunity, a carriage house without walls or windows in the H Street corridor, asks $450K. It's been on the market for 220 days.

What they're saying: If sellers are targeting more traditional buyers, they should expect to spend $2,500-$10,000 getting their house ready for market, Dreyer says. She recommends spending the bulk of your budget on three things:

ğŸŽ¨ Paint. Create a blank canvas with neutral colors.

🛠 Normal wear and tear. Service your HVAC, clean grout, power wash the exterior.

🛁 Refresh kitchens and baths. Get new hardware or add a fresh backsplash.

Bonus tip: Consider home staging. "Buyers in the D.C. area are extremely savvy and expect homes to look a certain way online before they'll even step foot in person," she says.

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 — 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 0.1% of D.C. metro-area sales in the first half of 2023, per the Zillow data, while those advertised as "remodeled" or "renovated" made up 28.7%.

Yes, but: Overall, homes in the D.C. metro are still selling over list price, per July data from Redfin.

"Most home buyers 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 42.5% of D.C.-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. Or if they're like this Georgetown listing, they might not even be a home at all.

  • D.C. homes go off-market after a median of 26 days, unchanged from a year ago.
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