Housing News

How About a “New” Old Home? Pandemic-Era Remodels Are Selling for Top Dollar

The combination of the pandemic helping homeowners see the potential in their properties and mortgage rates falling to record lows led to an absolute explosion in remodels and renovations.

And now, those remodeled and renovated homes are hitting the market for a premium.

In fact, homebuyers who purchased a remodeled home in 2024 paid more than $13,000 over the expected sales price, according to a new report from Zillow. It looked at homes listed on Zillow.com between June 2023 and May 2024.

The real estate listings site researched more than 2 million homes listed for sale in 2024. Properties that included the word “remodeled” in the listing received a higher sales price premium than the other 358 listing keywords analyzed.

Today’s buyers, it seems, would rather make a down payment on a house that’s in move-in condition, according to the study. And they are willing to pay up to 3.7% more than expected for a home that’s been renovated.

Amanda Pendleton, Zillow’s home-trends expert, said that although fixer-uppers initially are less costly, “buyers who are already stretching their budget to afford a home in today’s market may not be willing or able to spend more on renovations or repairs,” she said in a statement.

“A remodeled home may come with a higher price tag, but buyers can spread that additional cost over the course of a 30-year mortgage versus paying cash up front to make similar upgrades themselves,” Pendleton said.

Some 28% of the for-sale listings on the company’s real estate marketplace were for “renovated” properties, according to the report.

Although it seems logical to think that renovated homes would bring higher prices, that hasn’t always held true.

Last year, when Zillow conducted the survey, listings that included the key word “remodeled” only sold for 0.8% more. And before the pandemic, Zillow listings that used the descriptives “fixer,” “TLC,” “needs work” or “good bones” were the ones that were most likely to sell.

Now, it appears that homebuyers are more interested in homes that are already renovated rather than ones they’d need to renovate themselves.

That’s a shift from the last several years when fixer-uppers were all the rage.

Properties that needed some TLC got the upper hand in the mid-2010s, when millennials, fueled by escalating home values and the DIY movement and all the home-renovation shows on TV, snapped them up. They often hoped to earn a quick profit either by flipping them or earning huge gains in equity.

If you are looking for a bargain, a fixer-upper is a solid target, if you can find one. According to Zillow, “fixer-uppers” sell for 7.3% less than a similar home, the largest discount in three years.

However, inflation has ramped up renovation costs so much that it may be cheaper in the long run to pay more for a remodeled property.