As home prices and mortgage rates reach new highs, savvy Americans are looking for alternative ways to climb the real estate buying ladder.
The answer? A house in need of repairs.
Not only do these provide a viable gateway to homeownership, they could also pave the way for future profits.
Detroit is emerging as a hotspot for home flippers, according to a recent analysis by home improvement company Front Door.
The study revealed that a typical renovated home in the Motor City sells for a whopping 74% more than the average property in the area.
For those looking for a property in need of repairs, New Orleans has the most vacancies, while St. Louis offers the most affordable properties.
Frontdoor's analysis, based on home listing data from real estate company Redfin, reveals some interesting insights into the market.
A street lined with abandoned buildings in Detroit. Richard – stock.adobe.com NYPost Compositing
We identified the cities with the most “renovated” or “needing renovation” homes per 1,000 properties and calculated the average price of those homes. The resulting rankings show a stark difference in price between homes that have been renovated or needing renovation and those that don't have these tags.
Prices for renovated homes vary widely from city to city, creating an attractive prospect for buyers and sellers alike.
Premiums in Boston and Trenton, New Jersey, were 69.34% and 65.50%, respectively.
But the trend for fix-it-up properties isn't just confined to the Midwest: Annapolis, Maryland, and bustling New York City are also showing encouraging gains, with properties selling for 60.39% and 57.93% higher than the average, respectively.
NYPost Multi-House Resale List of Best and Worst Places. Frontdoor
Although Detroit's housing market has boomed recently, it remains one of the most affordable housing markets in the nation.
A recent Zillow listing featured a 5,200-square-foot home with nine bedrooms and eight bathrooms for just $124,900 — something that would have been unthinkable just under two decades ago, when foreclosures and dollar-for-dollar estate sales were the norm.
The city's resurgence is being driven by a resurgent auto industry, now focused on electric vehicles, that is drawing people back to Detroit, where there's plenty of housing waiting to be revitalized.
But not every city can experience the renovation dream.
Condo in an upscale neighborhood of Detroit. James Martin – stock.adobe.com
In Durham, North Carolina, and Kansas City, Missouri, the value of renovated homes dropped 30.59% and 21.05%, respectively.
Kansas City's affordable housing is due to a surge in out-of-state investors who prioritize rental income over the condition of the property.