California’s housing market continues to reach new — mostly unwanted — heights. The median selling price of single family homes across the state has now surpassed $900K, according to the latest report from the California Association of Realtors.

Even for California, that’s a jaw-dropper, underscoring the widening gap between the Golden State and other buzzworthy states courting new residents. Consider Austin, Texas: You can snag the same square footage there as in Los Angeles for roughly a third of the price ($590K versus $1.99M ). And let’s not forget, Austin rivals California’s cities with its thriving local economy and lucrative tech jobs.

Many prospective homeowners in California are reluctant to or are having difficulties in securing a mortgage with rates now at over 7%. More than that, the for-sale inventory, particularly for what we would label as “starter homes,” is dwindling as existing homeowners postpone upgrading to a larger home. Those who purchased a home a few years back when the mortgage rates were at around 3% have very little incentive to sell now, even if they are interested in a larger home or in relocating — as that would mean they’ll have to deal with more than double mortgage rates.

In this context, a question arises: Are there any affordable homes left in California? In other words, apart from relocating to friendlier shores, what options are there for Californians aspiring to homeownership? According to our most recent dive into housing data, fixer-uppers can be one way to go.

We analyzed over 3,100 listings in California, focusing on prices for turnkey homes compared to those hinting at repair work in the largest cities. Our analysis shows that pockets of affordability still exist in the Golden State. In some areas, you can save a significant amount of money by choosing a home that needs a little TLC instead of a move-in-ready option.

Bakersfield and Fresno emerge as the most budget-friendly options among high-flying California housing markets

Homes in Bakersfield are the most affordable among California’s major urban hot spots. The asking price for turnkey homes here hovers around $436K, while a fixer-upper in the same location goes for around $275K. This results in an upfront savings of $162K if you don’t mind the elbow grease. Of course, you need to budget for home remodeling as well, but it’s a pretty good deal nonetheless, particularly for those with a penchant for DIY projects.

Fresno is another California housing unicorn — an urban area where single family homes are still within reach. A remodeled home where all you need to do is get your stuff in hovers around $452K. However, if you’re up for a bit of work, you could save almost $148K by purchasing a fixer-upper instead.

Riverside and Oakland have higher housing prices, with turnkey single family homes costing over $700K in Riverside and nearly $800K in Oakland. Opting for a fixer-upper in these cities brings moderate savings of just under $100K. In Long Beach, you can save almost $135K by choosing a fixer-upper instead of a turnkey home. However, even fixer-uppers in Long Beach come with a hefty price tag of $837K.

In San Jose and Los Angeles, even a million dollars won’t get you a fixer-upper anymore. Both cities now have average prices for homes needing repairs well above the $1 million mark, with San Jose leading the pack. However, there’s a silver lining for homebuyers: Deals can still be found, but you’ll need to put in some effort. This means diligently searching for areas where fixer-uppers are still available, as well as actively upgrading and painting when you’ve found your ideal fixer.

Is getting a fixer-upper in LA worth it?

In a word, yes. Buying a home that needs some TLC in Los Angeles as opposed to a turnkey one can potentially save you $945K. And not only that, it’s a less competitive slice of the market from a buyer’s standpoint, so you have better chances of finding a home if you focus on fixer-uppers. As LA Realtor Brian Merrick puts it, “Lots of my clients tell me they do not own a hammer and only want done houses.”

Of course, seeing as most of the value of an LA home comes from the land, the precise amount of savings can vary significantly depending on the location of the fixer-upper and the work needed for the property. However, Merrick adds that not only are turnkey homes more expensive than fixer-uppers, which is quite natural, but they also sell significantly quicker. In other words, you’re saving money and getting the luxury of time: Instead of being involved in a bidding war, you can actually take the time to analyze the pros and cons of the properties you’re considering buying.

Best neighborhoods in Los Angeles for fixer-upper deals

Our analysis of LA listings reveals several zip codes with a higher concentration of fixer-uppers compared to the rest of the city. These areas are prime spots for those hunting for fixer-uppers in the City of Angels.

The 90065 zip code, encompassing neighborhoods such as Glassell Park, Mount Washington, Cypress Park and parts of Eagle Rock, registers more listings for homes needing repairs than for remodeled ones. These neighborhoods, with homes dating from the early to mid-twentieth century, are prime spots for finding diamonds in the rough. From Victorian homes in Cypress Park and Spanish colonial revivals in Mount Washington to mid-century modern houses in Glassell Park, there’s a great variety of fixer-uppers to be found here. Their convenient location, relatively close to downtown, adds to their appeal.

Los Angeles neighborhoods viewed from above
Northeast view of Cypress Park and Glassell Park from Frogtown hiking trail

Another promising area for those searching for a fixer-upper is the 90031 zip code, which includes Lincoln Heights, one of the city’s oldest neighborhoods. With an average housing stock age of almost 85 years, the chances of finding a gorgeous historic home to restore are high. The local architecture features Victorian, craftsman and mission revival buildings, as well as exquisite art deco homes from the 1920s and 1930s.

Florence and Green Meadows are two other neighborhoods that prospective homeowners should check out, especially if they’re not afraid to get their hands dirty with remodeling. Florence has a historic housing stock, with some homes dating back to the late nineteenth and early twentieth centuries, while Green Meadows developed a bit later. Both areas feature numerous listings for fixer-uppers, offering plenty of opportunities for those looking to invest in renovations.

Merrick also highlighted several up-and-coming neighborhoods in the city where fixer-uppers are promising in terms of future value. Inner-city neighborhoods such as Leimert Park, Inglewood, Silver Lake and Echo Park are experiencing a resurgence. Additionally, neighborhoods farther from downtown, like Calabasas and Woodland Hills, also offer significant potential for those interested in renovating fixer-uppers.

Adrian Perdaza, the owner of The California Home Buyer, a professional house-flipping company, says that he also keeps an eye on neighborhoods such as Glassell Park, Highland Park and Eagle Rock. “The community vibe is great in these areas, and they are still relatively affordable compared to other LA neighborhoods. Lots of potential upside,” he emphasizes.

Those who manage to snag a fixer-upper and move into these neighborhoods have extra help in the self storage market. Moving into a fixer may generally take longer, and self storage gives you the respite you need until you’re ready to find everything its own spot in the new home. Be it tools, equipment, furniture, electronics or other household items, using self storage can take a load off your mind during renovation. Moreover, fixer-uppers tend to be on the smaller side in terms of size, so self storage can act as an extension of your home, at a much lower price point than residential real estate. Renting a self storage unit in Los Angeles calls for an average of $260 per month or $1.8 per square foot.

The ups and downs of buying a fixer-upper in LA

Buying a fixer-upper can save you some serious bucks and help you climb the property ladder — but that’s not saying it comes without risks, or that it’s an easy feat. LA entrepreneur Ryan Crownholm sees both sides of the coin.

After moving his family to Colorado during the pandemic to enjoy the mountains and the outdoors, Crownholm decided to get back to Los Angeles, and he managed to secure a 100-year-old Spanish-style home in San Marino. “The plaster was cracked, the floors were stained dark and the lighting and appliances were old. It was a fixer-upper, but we were up for the challenge, having renovated homes before in Colorado and Los Feliz,” he explains.

All that work wasn’t, in fact, the most difficult part of buying and upgrading a fixer-upper. “The biggest challenge was the lack of time between moving out of our rental and into the new house. We decided to live in our 24-foot motorhome in the backyard for the duration of the renovation. So, for three months, my wife, two sons, our dog and I lived in the RV while we worked on the house,” he recalls.

However, it was the right decision for Crownholm and his family, as they love the east side of LA for its safety, great schools, walkability and proximity to the city’s great amenities. And there’s another huge perk of buying a fixer-upper, according to Crownholm: “Beyond the cost benefits, we love the process of making a house our home, adding our unique taste, and giving new life to an old house. If we ever buy another home, it will definitely be another fixer-upper.”

There are other things to pay attention to when purchasing a fixer-upper so that they don’t become major obstacles in your project. “Challenges include undisclosed problems that come up during renovations, like faulty wiring or rotting framing. It can blow your renovation budget quickly. Permits and regulations in LA can also slow things down,” noted Perdaza of The California Home Buyer. Thus, hiring a reliable home inspector to get a thorough look at the fixer-upper before you close the deal, and learning about all the intricacies of getting your building permits in LA should be high on your list of priorities.

Remodeling costs and return on investment

Before getting your toolbox ready, here are a few extra things to consider. After purchasing the property, getting your house inspection and following the other necessary steps, carefully plan your expenses and realistically assess what you can and cannot do. Decide which home improvements are necessary and which can be delayed or are potentially unnecessary.

Room being renovated

Plan your remodeling investments in detail. A full home renovation in the Los Angeles metro area costs around $155K, based on the median home improvement loan value. Of course, the cost can go up or down depending on the state of the property and the quality of finishes you choose. There’s always the possibility of saving money if you do some of the work yourself.

Finally, keep in mind that while you need to bring added value to a home, you should focus on sensible and necessary changes. Take into account the value of the houses in your neighborhood, and don’t launch into really expensive home remodeling projects that have little chance of bringing a return on investment.

How to start looking for a fixer-upper in Los Angeles

StorageCafe has already covered the topic of how you can generally find fixer-uppers, and most of the tips also apply when trying to locate a fixer home in Los Angeles. You might want to consider:

  • Listing services: Utilizing listing services can be incredibly helpful. These platforms often have filters that allow you to specifically search for fixer-upper properties, making your search more efficient and targeted. If there isn’t a specific “fixer-upper” filter, pay extra attention to properties that are described as “needing TLC,” having “good bones,” “in need of repairs” and so on.
  • Auctions: Attending property auctions can be a great way to find a fixer-upper at a potentially lower price. Keep an eye out for both in-person and online auctions, as these can sometimes offer hidden gems at competitive prices.
  • Real estate agents and websites: Working with real estate agents who specialize in fixer-uppers can give you an edge, as they often have insider knowledge about upcoming listings. Additionally, frequenting real estate websites can provide a steady stream of potential properties.
  • Driving around: Taking the time to drive around different neighborhoods can be surprisingly effective. This idea might actually be the best one if you are already familiar with the city and know your way around LA’s neighborhoods. You can spot “For Sale” signs and even identify properties that look like they need some TLC but aren’t officially on the market yet.

Additionally, joining local chat groups on social media platforms such as Reddit or Quora can connect you with residents and real estate enthusiasts. These groups often share tips about properties that are about to hit the market, or even off-market opportunities that haven’t been widely advertised yet.

If you’re somewhat new to the City of Angels or you want to browse potential properties from the comfort of your own home, there are plenty of options — a fixer-upper is always just a few clicks away. Start out with a bit of research on the city itself, as some areas are full of fixer-uppers. Make use of different listing services and real estate websites to gather information. Chances are, there is a fixer-upper out there just waiting for your TLC.

Methodology

This analysis was done by StorageCafe, an online platform that provides storage unit listings across the nation.

To help us determine the average cost of fixer-uppers and turnkey homes in California’s eight largest cities, we’ve used data from Point2, our sister division and real estate listing platform. We’ve considered “for sale” listings in Bakersfield, Fresno, Riverside, Oakland, Long Beach, San Diego, Los Angeles and San Jose on February 27, 2024. Listings include single family homes, townhouses, duplexes and triplexes. Cities with less than 100 listings, such as San Francisco, were excluded from this research.

To identify fixer-upper properties, we used keywords such as “TLC”, “good bones”, “as-is”, “in need of repairs” and others that acted as filters.

We analyzed the Los Angeles listings based on zip codes, to identify the areas in the city with a higher concentration of fixer-upper listings.

Data on self storage comes from Yardi Matrix, StorageCafe’s sister division and a business development and asset management tool for brokers, sponsors, banks and equity sources underwriting investments in the multifamily, office, industrial and self storage sector.

Fair use and distribution

This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.

 

Author

Maria Gatea is a real estate and lifestyle editor for Yardi with a background in Journalism and Communication. After covering business and finance-related topics as a freelance writer for 15 years, she is now focusing on researching and writing about the real estate industry. You may contact Maria via email.

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