With home prices and interest rates still at record highs and inventory squeezed, homebuyers and real estate investors may be better off purchasing a fixer-upper in some cities.
At least that’s according to a report from StorageCafe, which found that fixer-uppers cost an average of 29% less than homes that are ready to move in. And in 20 of the largest 50 cities, they can cost 50% less than a regular home.
And it seems fixing up a home is becoming more popular. While a fixer-upper might be daunting, as it requires extra investment and know-how, more than half of potential homeowners would consider buying a home that needs remodeling, according to a RE/MAX survey.
“More and more millennials are looking to fix up a home to make it their own because they are not finding many homes available or [have] the ability to compete for the home,” Jason Gelios, a Realtor in Michigan, told StorageCafe.
Best U.S. Cities to Buy a Fixer-Upper
To find the best places to buy a fixer-upper, StorageCafe worked with the real estate search portal Point2 to analyze over 70,000 listings in the 50 most populous U.S. cities. They then calculated the difference in asking prices for homes that had characteristics of being a fixer-upper, such as “as-is” and “TLC,” and regular listings. StorageCafe then compiled a list based on savings as well as potential inventory in a specific location.
Overall, Los Angeles is one of the best cities for renovators, despite its hefty price tag, StorageCafe found. While the median asking price for a turnkey home is $1.9 million, a fixer-upper is “only” $1 million. And with 26% of homes for sale representing fixer-uppers, house flippers have plenty of option to choose from. Still, remodeling will still cost on average an extra $155,000, the analysis found.
Other cities in California, such as Long Beach and Fresno, are also appealing for house flippers. While it noted that fixer-uppers tend to be smaller than…