The end of the fixer-upper: Remodeled homes sell for the highest premiums
Zillow research finds fixer-uppers are selling for the largest discount in years as buyers seek out move-in-ready properties
- Buyers pay 3.7% more than expected for remodeled homes.
- Remodeled homes get 26% more daily saves and 30% more daily shares on Zillow than similar homes.
- Fixer-uppers sell for 7.3% less than other similar homes, the largest discount in three years.
SEATTLE, Feb. 19, 2025 /PRNewswire/ -- Sorry, Chip and Jo, home buyers are no longer flocking to fixer-uppers. A new Zillow® analysis finds buyers are willing to pay nearly 4% more than expected for a home that is already remodeled (3.7%) — or an additional $13,194 on a typical U.S. home. That's the highest sale price premium of all 359 listing keywords Zillow analyzed across more than 2 million homes listed for sale in 2024.
Remodeled listings on Zillow get 26% more daily saves and are shared with a shopping partner 30% more often than similar homes that are not remodeled1. These metrics of demand suggest shoppers are more serious about these listings, and more likely to take the next steps in the home-buying process.
It might seem intuitive that remodeled homes would sell for more, but that hasn't always been the case. Last year's analysis of listing keywords found the term "remodeled" only contributed to a 0.8% sale price premium. And prior to the pandemic, Zillow research found listings that mentioned "fixer," "TLC," "needs work" or "good bones" were more likely to sell than listings without those terms.
"Fixer-uppers can be appealing to a first-time buyer trying to get their foot in the door of homeownership because they offer a lower initial price of entry," said Amanda Pendleton, Zillow's home trends expert. "However, 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. A remodeled home may come with a higher price tag, but a buyer would get to spread that additional cost over the course of a 30-year mortgage versus paying cash upfront to make similar upgrades themselves."
Once the bargain basement of the housing market, fixer-uppers are increasingly becoming an option reserved for cash-flush buyers who want to customize every inch of their space. Zillow research finds a "fixer-upper" sells for 7.3% less than a similar home, the largest discount in three years. A home that "needs work" or "TLC" sells for around 8% less than expected. That adds up to more than $28,000 on a typical U.S. home, a meaningful deal on the purchase price. But add in the rising costs of renovations, which have climbed with inflation and high interest rates, and those cost savings can quickly vanish.
America's love affair with the fixer-upper began in the mid-2010s. As home prices recovered from the Great Recession and began to rapidly increase, first-time millennial buyers sought out more affordable options, choosing homes that needed work rather than move-in-ready properties. Dramatic before-and-after renovation TV shows and the DIY movement took off, inspiring many others to take on their own fixer-upper. Skyrocketing home values meant that homeowners could afford a few mishaps or budget overruns and still see huge equity gains while their homes were appreciating so rapidly.
Home value appreciation has since come back down to earth. In 2024, homes nationwide appreciated 2.6%, and Zillow is forecasting 2.9% home value growth in 2025. As buyers begin to gain the upper hand in more parts of the country, sellers can no longer be assured that a costly gut renovation is an investment that will quickly pay off.
Nearly 30% of all for-sale listings on Zillow are now described as "renovated" (28%). This comes after the pandemic ignited a renovation boom, fueled by the rise of remote work, the unprecedented growth in home equity and an aging housing stock. These newly renovated homes are now beginning to hit the market, just in time for eager buyers looking for move-in-ready properties during the spring home shopping season.
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1 According to a previous analysis of homes listed for sale on Zillow between June 2023 and May 2024. For more information on methodology, please contact [email protected].
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SOURCE Zillow Group, Inc.