A particularly intrepid group of homebuyers actively scours the market for dilapidated properties known as “fixer-uppers,” and brokerages are getting in on the action, the New York Times reported.
Real estate insiders told the Times that there is a rise in the number of buyers who look out for properties in need of a major overhaul and watch out for listings with telling phrases such as “bring your contractor and your imagination.” These buyers look to rebuild according to their specifications and end up with an attractive home at a bargain-basement price, insiders said.
Jonathan Miller, the president of appraisal firm Miller Samuel, said that between the fourth quarter of 2011 and the same period in 2012, sales of properties rated as “wrecks” or in “fair” or “poor” condition rose 40 percent.
Part of the reason for this trend, Miller said, was a continuing decline in housing inventory, with 34 percent fewer properties listed in the fourth quarter of 2012 compared to the same period the previous year. “So we’re seeing more creative and flexible buyers,” Miller said, “and an increase in sales of places in poor condition — aka wrecks.”
Manhattan housing inventory dropped 34.2 percent in that same period, as The Real Deal previously reported.
Brokerages such as Brown Harris Stevens and the Corcoran Group cater to this market segment by allowing buyers to search for listings containing the trigger words, which included “wreck,” “estate sale,” and “fixer upper.”
“There are always buyers who want places they can put their mark on and don’t want to pay for someone else’s renovation,” Doug Perlson, RealDirect’s CEO, told the Times. [NYT] –Hiten Samtani