Fixer-upper homes may not be as good a bargain as you think. A new analysis from Zillow Digs reveals that the average fixer-uppers list for just eight percent less than market value, saving buyers only $11,000 for renovations before they break even.
Zillow Digs analyzed nearly 70,000 listings for fixer-uppers around the country to see how the homes’ list prices compared to their estimated values. If renovation costs exceed the home’s discount, then it may be more cost-effective to buy a similar home that doesn’t require renovations.
Of all the metros analyzed, fixer-uppers in Phoenix have the smallest cash discount, saving buyers just $1,000 off list price. This small savings upfront gives buyers very little financial leeway for renovations.
While no two fixer-uppers are alike, buyers are more likely to find large upfront cash savings on fixer-uppers in expensive markets, where just a small percentage discount could save buyers quite a bit of money to spend on renovations. For example, fixer-uppers in San Francisco are discounted only 10 percent, which is lower than other metros, but this still gives buyers $54,000 in upfront savings for renovations on the median home.
“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 chief economist. “While an eight-percent discount or $11,000 in upfront savings on a fixer-upper is certainly a good chunk of change, it likely won’t be enough to cover a kitchen remodel, let alone structural updates like a new roof or plumbing, which many of these properties may require.”
Curious what the fixer-upper discount is in your area? Check out the full data below!
| Metro | Renovation Breakeven | Fixer-Upper Discount |
| United States | $ 11,000 | 7.6% |
| New York-Northern New Jersey | $ 12,000 | 4.4% |
| Los Angeles-Long Beach-Anaheim, CA | $ 12,000 | 2.7% |
| Chicago, IL | $ 19,000 | 13.8% |
| Dallas-Fort Worth, TX | $ 6,000 | 5.4% |
| Philadelphia, PA | $ 17,000 | 13.7% |
| Houston, TX | NA | NA |
| Washington, DC | $ 15,000 | 5.9% |
| Miami-Fort Lauderdale, FL | $ 4,000 | 2.9% |
| Atlanta, GA | $ 4,000 | 4.9% |
| Boston, MA | $ 10,000 | 3.6% |
| San Francisco, CA | $ 54,000 | 9.5% |
| Detroit, MI | $ 6,000 | 8.7% |
| Riverside, CA | $ 3,000 | 1.2% |
| Phoenix, AZ | $ 1,000 | 0.4% |
| Seattle, WA | $ 24,000 | 8.2% |
