In years past, the typical homebuyer displayed a marked preference for move-in-ready properties instead of fixer-uppers — but that may be changing. A recent article on Realtor.com examines the phenomenon of the home improvement project “that never ends,” with buyers increasingly choosing to tweak, personalize and perfect every inch of their new residence over a period of months or years.
The shift is due at least in part to the new generation’s emphasis on a customized living space. Long-running renovations, though, can take their toll on developers as well as clients. One interior designer recounts the tale of a $27 million mansion whose owners bounced between adding three new bedrooms, then five, then none; a separate spa and gym structure, which was then added to the main interior; and an exhausting process after which the property sat gutted and unlivable three years after its purchase.
The trend toward renovation isn’t just a cultural shift. The American housing market’s unusual recovery pattern is currently stifling rates of new building, with single-family home construction only 60% of what it was in the 2000’s. The depressed inventory and accompanying price surge has caused many homeowners to improve their current property, and new buyers to seek out less expensive options with the aim of remodeling after the papers are signed.
What Professionals Should Know
What does this trend spell for real estate professionals? For realtors, advertising and emphasizing a property’s potential can prove to be a lucrative strategy. Buyers are increasingly showing that they pay attention to what a home may offer, instead of what it currently does. For developers and contractors, the shift towards larger-scale renovations means that price quotes should always include overage considerations in addition to any project-based flat fee — especially for time-consuming jobs like historic restorations or high-price residential remodels.
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