With growing numbers of buyers finding it difficult to purchase the home of their dreams due to a combination of limited inventories and rising prices, more are turning to fixer-uppers as a way of getting the home they’ve always dreamed of.
According to the 5th annual Houzz & Home survey of more than 120,000 consumers, more than a quarter of current home renovation projects are being driven by recent purchases. A large number of homeowners say they chose to renovate instead of buying a “perfect” home because doing so is a cheaper option, and one that can often provide a decent return on investment.
The survey found that recent home buyers are more likely to invest greater capital in their home renovations. Recent home buyers invest an average of $66,600 per property, compared to just $59,800 for non-recent home buyers. In addition, they also take on larger projects and are three times more likely to renovate the entire home than other homeowners, the survey found.
The most popular renovation projects are kitchen remodels, followed by remodels of master and non-master bedrooms. Curb-appeal and home automation projects are also popular with renovators.
"2015 was another strong year for the home-renovation market, with home owners continuing to increase investment in their homes," Nino Sitchinava, principal economist at Houzz, said in a statement. "While the majority of renovations are spurred by home owners' desire to upgrade a home they have lived in for some time, recent home purchases are also an important driver of home-renovation activity. Recent home buyers tend to do more, spend more, and are more likely to hire professionals to help with their renovation projects than other home owners. As the churn in the housing market picks up in the near future, the home-renovation market should see meaningful growth."
Home owners who are preparing to sell reported spending slightly over half the amount that recent home buyers do on renovations ($36,300 versus $66,600), which shows they are "prioritizing immediate return on investment and rapid sale," the Houzz survey notes.