How to Make a Home Stand Out in Today's Market? Prioritize Home Condition

Amit Arora, VP of Investments at Opendoor

We’ve seen many shifts in residential real estate since the pandemic — from a spike in home buying and record-low interest rates to a lack of inventory, increasing home prices, and elevated interest rates today. The dynamics of home shopping have evolved and buying preferences have evolved with it. 

In fact, a recent Opendoor analysis found buyers are increasingly prioritizing a new factor in their home search: home condition. Our data shows that homes in better condition are not only closing at or above their list price nearly 10% more often than comparable homes in worse condition but are also selling more than 20% faster. 

As homeowners consider the sellability of their home — and determine how to make it stand out in today’s market — it’s important to understand buyers’ mindsets and behaviors around home condition. Here are the top three reasons buyers are now prioritizing home condition.

1. People have smaller budgets for upgrades and repairs 

Opendoor survey data found 77% of buyers and sellers are concerned about interest rates and 72% of home buyers are worried about affordability. Personal savings have dropped below the historical average and many people right now have less cash to make upgrades. Plus, we found 67% of buyers don’t want to pay for remodeling or repairs. 

As a result, homes already in good condition become even more desirable — removing the need to make upgrades when preparing to sell or improve a recently purchased home. And we took notice. 

This year, we expanded our repair and renovation capabilities, as well as interior design efforts, to provide more buyers with turnkey options.

We developed a new upgrade program for a select segment of eligible Opendoor homes, which includes thorough remodels with fully modern finishes — from renovating kitchens and bathrooms to reimagining floor plans — all completed by our team of experts before the home is listed on the market. Homes in this upgrade program tend to sell nearly 30% faster than more dated homes. 

2. Remote work widened the pool (and search) for home buyers

Homes in better condition tend to sell at or above the list price more often than worse condition homes in the same area. Our analysis found that from 2017 to 2019 homes that were in better condition closed on average at or above their list price 46% of the time. Fast forward to post-2020 and this figure has exploded: peaking at 77% in 2021, and 67% in 2022. 

And with the rise of remote work – the number of remote employees is expected to nearly double since pre-pandemic rates over the next five years – we’re seeing people be more mobile and flexible than ever, expanding their search criteria to a new state or surrounding neighborhoods near larger metros. So much so, that from 2019 to 2022, we found the average move distance has increased by 38%. 

What does this mean? As buyers widen their search, the definition of good location widens along with it — and condition will increasingly be the differentiator that moves the needle for buyers. Home sellers may need to rethink the adage “location, location, location.”

3. Home condition stands out even more in a cooling market

While the housing market remains competitive for buyers, things are starting to cool as we enter the winter months. Our data shows new listings decline on average 21% from the summer to fall. And year-over-year existing home sales sagged for the third consecutive month in all four major U.S. regions, according to the National Association of Realtors (NAR).

When Opendoor looked at the last six years of listing data, we discovered that home condition matters more in colder markets than in hotter ones. Home sales are slower in colder markets, so homes in better condition have a bigger advantage — whereas people are more willing to look past condition in hotter markets where competition is fiercer. In hot markets, homes in better condition than comps typically sell six days faster. But in cooler markets, the speed of sales nearly doubles for better condition homes, shortening the time on the market by 11 days.

What can sellers do to meet buyers where they are?

Sellers who want to maximize price and minimize dates sitting on the market should prioritize home condition when getting ready to sell their homes. In preparation, they can:

● Consider upgrades that will make their home more appealing 

● Replace outdated features that are no longer trendy or in fashion, like popcorn ceilings or fluorescent lighting

● Invest in quality upgrades like premium appliances, cabinetry, and fixtures

"As homeowners consider the sellability of their home — and determine how to make it stand out in today’s market — it’s important to understand buyers’ mindsets and behaviors around home condition."

As residential real estate continues to shift and settle post-pandemic, sellers can navigate the market with more confidence understanding what buyers are looking for. While sellers can’t change the location of their home, they can improve the condition and deliver the move-in ready home that more buyers desire.