The Fixer-Upper Discount

Abstract

The frantic pandemic pace of the housing market in the United States may be slowing, but the shortage of available homes remains, especially affordable ones. What about a fixer-upper? According to a recent study by StorageCafe, in 36 of the 50 largest U.S. cities, fixer-uppers list for at least 25 percent less than a typical turnkey home; in nine of those cities, the discount tops 50 percent. Perhaps it's time to cue up those "Property Brothers" reruns? Of course, a lower price is useless if it doesn't make a home affordable. In Los Angeles, among the most expensive American cities, a typical fixer-upper comes with a $500,000 discount - the largest dollar amount among the 50 cities. Two other California cities, San Diego and San Francisco, offered the next-best discounts, each saving buyers at least $405,000 compared with a turnkey home in the area. Detroit had the least expensive fixer-uppers, which list for 48 percent less than turnkey homes, or just $59,900. While a discount is great, buying a sagging property is only the beginning of the process.