Key Takeaways:
The U.S. housing market is increasingly divided, with move-in ready homes selling 37 days faster than other properties in March, the widest gap for that month since 2020. Homes that went under contract in March sold in a median of just 19 days, compared with a 56-day median for all listings, according to a Zillow analysis.
"The bar is higher—people are the opposite of indiscriminate," said Kara Ng, senior economist at Zillow. Four years ago, “people were buying homes indiscriminately,” she said.
The divergence is clear in markets like Tampa, Florida, where 16% of homes that went under contract in February did so within a week of listing. Of that group, nearly one-third sold for more than the asking price. This comes as about 34% of existing homes on the market need repairs, a recent survey of real-estate agents by John Burns Research and Consulting found.
This trend indicates a bifurcated housing market where renovated, well-priced homes are in high demand, while outdated properties may face price pressure and longer sales cycles. This could influence seller strategies, potentially boosting the home renovation sector while also signaling underlying weakness in the broader housing market due to buyer selectivity driven by high costs.
High home prices and elevated mortgage rates are making buyers cautious. They are hesitant to purchase homes that are outdated or need repairs due to the uncertain cost of renovations. An older roof can also raise a buyer’s home-insurance costs or make it difficult to obtain insurance at all.
Buyers are willing to jump quickly on homes that are priced right and renovated, with no major repair issues, real-estate agents say.
Jake Cross and his wife listed their renovated house in St. John, Indiana, for sale in March for about $300,000 after buying a larger home. “There’s absolutely nothing for sale in the $300,000 range…that looked modernized at all,” Cross said. “It seemed like it would be a decent time.” The first buyer who toured the house the day after it listed put in an offer slightly above the asking price, which Cross and his wife accepted.
Pricing strategy can also be a challenge. Almost half of potential sellers surveyed by Realtor.com in March expected to receive their listing price, and more than one-third expected to sell for above the listing price.
“It depends on how realistic they want to be with where the market is, versus where it was,” said Paige Martin, a real-estate agent in Houston. “For those who are aspirational in what they are hoping to get, because their neighbor got it a year and a half ago, those folks are having a little bit more trouble.”
This article is for informational purposes only and does not constitute investment advice.
