The real estate market has been on a tear in recent years, with home prices rising at a record pace. However, there are signs that the market is starting to cool off. Interest rates are rising, and inventory is starting to increase. This is good news for buyers, especially those who are interested in fixer-uppers. This is because buying a fixer-upper house can be a good idea - under the right circumstances. With the stars beginning to align, here’s why you should be considering such a purchase right now.
There are a number of reasons why now is a good time to buy a fixer-upper. One of the most telling is that prices are more affordable. When the market is hot, prices are driven up by competition. This can make it difficult for buyers to find a home that they can afford. However, when the market cools off, prices start to come down. This makes it easier for buyers to find a fixer-upper that they can afford. Additionally, with the price of lending creeping ever higher thanks to the US Federal Reserve’s constant tinkering with the base rate, it becomes a smarter financial move to source a smaller home loan to minimize costs.
Another major advantage to buying a fixer-upper is that inventories are higher. There are more fixer-uppers available than there are move-in-ready properties, and this helps during times when markets are cooling. Hot markets, like those in the days of early 2022, were perfect for sellers, who have their pick of buyers willing to pay top dollar for their properties. As markets cool, however - as they’re predicted to over the next few months - sellers need to be more competitive. Lower offers are more likely to be accepted, and sellers are also likely to be more willing to negotiate more. This goes double on homes that are in need of repair work.
If this sounds like good news to you - and for many it will - it’s a good idea to start looking more deeply into what it takes to buy a fixer-upper. The idea of being able to purchase a property for a song and then turn it into the home of your dreams with some sweat equity on your part is appealing, to say the least! However, a lot goes into transforming a fixer-upper into your dream home. There’s a lot to keep in mind, so here’s what you should be aware of and what you should be doing:
Buying a fixer-upper can be a great way to save money on a home purchase. This goes double when the housing market is going through a cooling-off period or is otherwise showcasing some major volatility like it is now. You’ll be able to afford more property for less, and you can more easily control your related costs in regard to mortgage rates by buying a more modestly-priced property because it needs some moderate repair work.
However, it's important to do your research and be prepared for the work involved. Buying a property at a rock-bottom price isn’t going to help you in the long run if you don’t factor in the cost of major repairs. Yet at the same time, if you're willing to put in the time, money, and effort necessary to rehab a house, you can turn a fixer-upper into your dream home. In a cooling housing market, having a home of your own that you can afford is more valuable than almost anything.