MINT HILL, NC – We are all aware prices are going up on pretty much everything these days. Even when gas prices go down a bit, they are still much higher than they were in 2021 or even earlier in 2022. Inflation isn’t sparing anything and the housing market is certainly being impacted, too.
Home sales are slowing, mortgage rates are going up, and even the home seller’s fix-it budget is taking a hit. Some of this is caused by homes staying on the market longer and some of it is caused by the higher prices for materials and labor.
According to USAToday.com, the home seller’s fix-it budget has gone up by more than 50% this year. The average cost of a work order in September last year was about $2,537, while this year it’s up to about $3,831, according to PunchListUSA.
This data is coming from a company that works in 14 major cities and looked at more than 26,000 estimates. They are showing that repair requests from home buyers have also gone up more than 100% compared to the same time last year.
Homebuyers Aren’t Fighting for Houses Anymore
A year ago, sellers didn’t have to make the same repairs or concessions they are making today. With a line of buyers ready to bend over backward to get into a home, it was much easier on sellers. Those days are over.
With more homebuyers willing to walk away and fewer bidding wars, sellers are making more repairs just to get the home sold. As the housing market continues to cool off, this will likely become more and more common.
A softer housing market means buyers can walk away if they don’t get the repairs they want. This is part of what has led to many more contracts being voided instead of closed.
Higher Cost for Repairs
In addition to buyers being able to walk away from the deal, sellers are finding the prices of repairs are much higher. The most common repairs include heating, ventilation, and air conditioning, electrical wiring, kitchen upgrades, and roofing repairs. The price for these repairs, overall, has gone up about 37% year-over-year. Add in that the average home for sale is spending 50 days on the market, and sellers are in a bit of a bind.
Higher Mortgage Rates Are Contributing, Too
With mortgage rates soaring to more than 7%, fewer potential buyers are shopping for homes. This is also a factor causing sellers to spend more on repairs than they would have last year.
Since there are fewer buyers, multiple offers are simply not happening as much. Fixer-upper homes are no longer something buyers are looking for. They want move-in-ready homes and they want more transparency when it comes to what they are paying for.
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me. I will help you make the right move! Anna Granger (704) 650-5707 | firstname.lastname@example.org | www.1stchoicepropertiesinc.com