Buyers’ interests and expectations aren’t the same as they were when many of today’s sellers bought. Years of watching made-up “shows” on HGTV, passing through a major recession, and all of the on-line information and misinformation have combined to change buyers’ interests and expectations. To maximize their profits, sellers need to understand that the hot buttons which motivated them when they bought have changed.
Home Projects are No Longer Popular
In the late ‘90s and pre-recession 2000s, financial speculation often played a substantial role in buyer decisions. Buyers wanted the biggest home they could afford in a nice neighborhood. Ironically, the demand for fixer-uppers was so high that buyers often paid premiums for homes that needed work because of their perception that those properties provided the greatest sweat equity potential.
While homes will always be thought of as an investment, today’s buyers are more interested in their homes being a base from which they can enjoy their busy/fun lifestyle after long days at work. The last thing buyers want is to come home from work to a property that needs work.
Today’s Housing Stock is Tired
Many currently available listings need work. Most homeowners weren’t investing in new kitchens and baths during the recession. Properties that needed updates 15 or 20 years ago need them even more today. Buyers get overwhelmed by roofs, windows, driveways, and furnaces that are into their retirement years. Buyers aren’t looking to take on someone else’s unresolved problems.
Baby-boomers and their parents had home workshops, toolboxes and time. Remember your grandfather’s pegboards with outlined tools? Homeowners often felt a sense of accomplishment when they had a chance to use their stuff.
The priorities of today’s buyers are different. Instead of tools and time, today’s buyers have smartphones for figuring out what needs to be done and who can do it best. They have busier lives. They have no interest nor time to “tinker” with stuff that the seller never got around to.
Financing Improvements is Harder
Pre-recession home-equity loans were easily available and a popular way to finance updates. As values were expected to continue rising, the focus was on how much money was needed for the project as opposed to existing equity. Post-recession, equity loans are harder to come by. Most buyers don’t have the cash or equity needed to finance improvement projects.
There are three primary reasons that affordable move-in-ready homes are so popular and sell for so much. First, buyers don’t want the hassle of having to get the work done. Second, there is a shortage of move-in-ready listings. Third, the cost of improvements previously completed by sellers can be rolled into the sale price and financed through the buyer’s new mortgage.
The shortage of move-in-ready listings is even more extreme with entry-level properties. Move-in-ready homes are what buyers want. They sell quickly and buyers are willing to pay a premium for them.
Buyers’ interests and expectations aren’t the same as they were when many of today’s sellers bought. Years of watching made-up “shows” on HGTV, passing through a major recession, and all […]
The 2008 recession took everyone by surprise when it took a 40% bite out of local real estate equity before bottoming out in 2011. The market has been on a […]