While the shows on HGTV may paint another picture, buying a fixer-upper may not be as great of a value as everyone thinks. At least that was the finding of a new Zillow study.
The average fixer-upper home in the U.S. lists for just 8 percent less than market value, saving buyers only an average of $11,000 for renovations before they break even, a new Zillow Digs analysis shows. In the Miami metropolitan area, fixer-upper homes list for a 2.9 percent discount. That saves buyers an average of just $4,000 for renovations, and a similar home not in need of updates might be more cost-effective.
Zillow Digs analyzed nearly 70,000 listings for fixer-uppers from around the country to see how their list prices compared to their estimated values. Fixer-uppers were identified based on listing description keywords that signaled the home needs work, like “TLC,” “good bones” and “fixer-upper.”
“Fixer-uppers can be a great deal, and they allow buyers to incorporate their personal style into a home while renovating, but it’s still a good idea to do the math before making the leap,” says Svenja Gudell, Zillow’s chief economist.
Best place to buy a fixer-upper, according to the study: Cleveland, Ohio. There one can buy a fixer-upper at 31.9 percent below market value.