Paying to purchase and repair a fixer-upper | Real Estate Newsletter

Does the thought of buying a fixer-upper fill you with excitement or dread?

I like watching home renovation shows, but I’d have to think hard about whether I’d want to take one on.

I talked to a first-time home buyer who wasn’t having any luck grabbing one of the many shiny, newly renovated homes she and her husband bid on in Southwest Philly last year. So they decided to look at homes that needed some work.

They told me that a type of mortgage that combines money to purchase a home with money to fix it up helped relieve some of the stress.

Keep scrolling for that story and to see how much wealth Philly-area homeowners are gaining, find out which South Jersey town is tiptoeing through the tulips, and peek into a smart home in Montgomery County.

📮 Do you have a story to tell about tackling a fixer-upper? Or if you haven’t tried, would you? For a chance to be featured in my newsletter, let me know.

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— Michaelle Bond

Amina Thompson-Wright and Dannelle Wright weren’t interested in a fixer-upper at first. But after months of sellers not accepting their bids, they wound up buying a vacant home that had a crack all the way up the side.

“You could literally see inside the house from outside,” Thompson-Wright said.

The couple bought and fixed their home through the 203(k) program offered by the U.S. Department of Housing and Urban Development.

The agency is trying to get more home buyers to use its combo purchase-renovation loan. It has said 203(k) rehab loans are key to increasing the supply of affordable homes in underserved communities, preserving existing housing, revitalizing neighborhoods, and expanding home ownership.

Read about some pros and cons of using loans like these and one family’s experience in Southwest Philly.

Owning a home is the way most U.S. households build wealth.

Nationally, a median-priced home is worth $190,000 more now than it was a decade ago, according to a new report from the National Association of Realtors.

How much wealth you gain through price appreciation depends on factors like your location, the initial price you paid, how long you’ve lived in your home, and your race, according to the report.

Across the Philadelphia metro area and the country, homes owned by Black households appreciated in price the least among racial groups over the last decade.

In the Philly region, here’s the breakdown of home price appreciation by race or ethnicity over the last decade:

🏡 White homeowners gained $108,200.

🏡 Asian homeowners gained $104,440.

🏡 Hispanic homeowners gained $95,730.

🏡 Black homeowners gained $86,580.

Read on for more details and a breakdown of homeowners’ typical wealth gains by income level.

Karen Cole fell in love with a contemporary home on four acres in Lower Gwynedd. But it needed a lot of work, and her husband, Bob, needed some convincing.

The lot and location won him over.

The Coles’ renovated home is at the end of a private road and surrounded by the Wissahickon watershed.

The three-bed, 2½-bath home spans about 4,800 square feet and has soaring ceilings, a dedicated entertainment room, an art studio for Karen, a workshop for Bob, and room for the couple’s extensive art collection.

The smart home features a state-of-the-art sound system, lighting that changes based on circadian rhythm, and shades that respond to the sunlight coming into the house.

Peek inside the Coles’ home and discover the role the neighboring Wissahickon Creek had in their ‘70s love story.

Known as Jimmy Tulip, Jim Cuifolo plants 50,000 tulips annually in and around a South Jersey town.

A civic leader who hired Cuifolo to plant around his law office and home (They’ve become springtime attractions among residents.) said Cuifolo is not a gardener — “He’s an artist who works with flowers.”

Question: Where does Jimmy Tulip plant his flowers? This story has the answer.

Let’s talk home listings.

Normally, spring is the busiest time for the housing market, and sellers flock to list their homes for sale early on to get in front of a flood of buyers.

But I’m not seeing many for-sale signs during my after-work walks around my neighborhood, and you’re probably not seeing many where you live. The number of newly listed homes for sale in March throughout the Mid-Atlantic region was way down from where it was before the pandemic.

Here are some March stats for the Philadelphia metropolitan area from the multiple listing service Bright MLS:

🔻 The number of new listings coming onto the market was down 25% from the same time last year.

🔻 New listings were at their lowest level in two decades.

🔻 The number of homes available for sale was 40% lower than it was four years ago.

Across the Mid-Atlantic region — which includes Philadelphia, Baltimore, and Washington — there was only just over one month of home supply in March. That means given the rate of sales, the total number of homes for sale would have taken just over a month to sell. In the Philly metro, homes would have sold in less than six weeks.

As a reminder, a market that’s balanced for sellers and buyers has about six months of supply. So if the imbalance is telling homeowners to sell, why aren’t they?

The short answer is mortgage interest rates. They’re pretty high, compared to where they were a couple years ago. Homeowners who bought or refinanced when rates were low and don’t have to sell, don’t want to because they’ll probably pay higher rates for their next house.

The low supply of homes is one reason some homeowners are considering fixer-uppers for the first time. It’s also why the Philadelphia region’s housing market was still competitive in March. A smaller number of buyers — they care about mortgage rates, too — fought for a limited number of properties, keeping home prices high and sales swift.

Do you know the location this photo shows?

📮 If you think you do, email me back. You and your memories of visiting this spot might be featured in the newsletter.

Shout-out to my two little cousins — who aren’t actually little anymore — for each buying their first homes. They read this newsletter, so I know they’ll stay informed and inspired and be great homeowners.😉

Enjoy the rest of your week.