For decades, the Bay Area housing market has been renowned across the country for beautiful homes and outrageous property values. It has created a situation where homeowners seeking to buy a home in the Bay Area often feel overwhelmed and priced out of the market. On top of that, real estate markets all across the country have seen unprecedented rises in property values and a lot of this has to do with low inventory in various communities. In other words, there are more buyers in most markets than there are houses to buy. This has created unprecedented competition between prospective buyers, and as a result property values have risen.
For homebuyers who are willing to buy “fixer-uppers” or properties that require significant work in order to be comfortably uninhabitable for the years to come, there are a number of opportunities out there. Meanwhile, the sellers of these properties are finding unprecedented interest in their houses. This means that the housing market has created a situation where fixer-uppers are once again a desirable option, not just to renovation firms, but also to prospective homeowners.
Incurring the Cost of Renovation
There is a bit of a snag, however. Let’s say you’re an interested home buyer who is finding it difficult to buy a home in your price range. The only homes that you can seem to find are houses that need a lot of work in renovation. That means that you’re not only going to be paying off the mortgage but also paying for the extensive repairs that the home needs to ensure its future habitability.
That means that the same people who are being priced out of purchasing fully renovated move-in-ready homes are likely going to be priced out of buying fixer-uppers as well. They’ll be able to buy the home, but they’ll need to incur either a second loan or put their own money into the renovations.
This means that the only people that are going to be willing to invest in a fixer-upper, are firms that will buy the property as cheaply as possible, pay for the renovations themselves, and then sell the property for a fortune, with the original owners taking a heavy loss.
Another Option for Sellers
If the thought of selling your house to a company that’s going to make a fortune on it in a tough market doesn’t appeal to you, there are some renovation firms that will take work on consignment. These firms operate exclusively in markets like San Diego and the Bay Area because that’s where the most money is and the highest property values are. It’s a good choice for sellers who want to get the most money for their property, but don’t have enough money to make the renovations themselves.
