I became a full time Real Estate agent back in 1989. This was when the dinosaurs roamed the earth and the MLS was a printed phone book. In this primitive world there was no world wide web. 1993 was the first year of the web with the advent of Netscape Navigator. Shortly after getting into the business, the MLS “PhoneBook” was augmented with a 2400 baud modem, spitting out new listings on thermal paper, but it would be several years before the MLS phonebook was eliminated.
During this time, very few people had a strategy for fixing up homes to maximize value. To the best of my memory, I was one of the few, if not only agents that provided my sellers with a “Stager” who personally coached them on how to best present their home for sale. With my knowledge of home improvement and my stager’s design expertise we would put together a game plan that worked with the seller’s existing furnishings and budget to maximize value. This was over 20 years ago. Fast forward to today, and it seems like many if not the majority of vacant properties I show have been professionally staged with furniture and nick knacks. Buyers even ask, “Is this vacant or has this been staged?”
Which brings me to the gist of the article. Where have all of the fixer uppers gone? In my first 5-10 years in the business, I remember the home inventory to be more varied. Yes maybe 1/3rd of homes were presented well. These top tier homes were homes that had recently been fixed up sometimes within the last decade. These homes had good condition because their owners had put money into the home with the intent of living there. Then life happens and it is time to move. These homes showed as contemporary because the owner had fixed the home up for themselves and then maintained the home well. This home was then offered to the public. Another 1/3rd of the homes were the middle tier, the average home. These homes were remodeled 10-25 years ago. Some were fixed and maintained well, while others were a little worn around the edges but better than original condition. Then there was the bottom 1/3rd of homes. Homes that had nothing done to them since new and looked dated and beat up.
These bottom 1/3rd of homes, the fixer uppers, were common. I can’t tell you how many crotchety 80 year old owners I have met with that said “I am not doing anything, I am selling it As-Is”. This was said with proud fervor. Like an a true old school crusty WWII vet that knew he had to pull up his boot straps, so the buyer sure well could do if for themselves. Buying Southern California real estate has always seemed like a privilege and buying a fixer upper was just the price of admission. The buyer that could afford a home that was already done and ready to move in was the exception. It was just a given that after you bought a home, it might take time and sweat equity to before you had the home of your dreams.
This is not the case today. When I assess a homes value I look at all of the sales in a particular neighborhood with comparable square footage. Traditionally there would be homes that need work, average homes, and homes that have been extensively remodeled. This distribution of homes then produces the typical bell curve of homes. A couple of real dogs at the low end, a couple of gems at the top end, and the bulk of sales in a middle of the range. This range for your average East Long Beach home may be $150,000. What has shocked me as of late, is that no longer do I see many fixer uppers or many old school average homes. The new average home that it on the market has had extensive remodeling and is professionally staged.
As I sit down and write this article. I took a at all sales in the Los Altos area for the last 180 days. This search includes active listings, pending sales and closed sales for the last 180 days. I categorized the homes into one of three categories. 1) Fixer Uppers, 2) Clean Homes but not upgraded or staged 3) Homes that have been staged and/or have been fixed up extensively either by the owner or with the intent of selling. There were a total of 122 SFR homes in the above search. The number of homes in each category are:
1) 12% – Fixer Uppers – These are homes where the photos clearly show that the home was just left. Homes in need of immediate attention with immediate work that that needs to done by the next buyer.
2) 14% – Average homes – These are homes that may be somewhat dated, but clean. The owner has upgraded since the home was built in the 1950, but probably not in the last 15-20 years. The home looks presented well, but with their existing furniture, or it is vacant. Professional staging is not being used.
3) 74% – Homes that have been staged and / or remodeled extensively such as flips – These homes have been extensively remodeled. Either by the current owner or specifically with the intent of selling the home, such as a flipper. They are likely using professional staging or it is clear that the home was just remodeled for the purposes of selling.
Summary – 3/4 of all homes are extensively remodeled and or professionally staged!!! This means that the new normal is NOT the Average home. The new normal is the highly upgraded and / or professionally staged home. This is a major change!