How Smart Home Tech is Impacting Real Estate
By: Matt Murphy, Chime Technologies
Imagine living in the world of the Jetsons. Flying cars that fold up into suitcases. Talking dogs. Living in outer space. Many of these smart technologies remain in the fantasy world of cartoons and sci-fi movies, but still more have become a part of our daily lives, like connected refrigerators and dishwashers, universal home entertainment remotes, and HomeKit enabled door locks that unlock as you approach them.
Adding smart features like these to a home has become increasingly popular and accessible, a trend which has created a new subset of listings available on the market: the appropriately-named smart homes.
Coldwell Banker and CNET say that a smart home is:
“[a] home that is equipped with network-connected products (i.e., “smart products,” connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.”
In fact, only three smart upgrades are required to dub a house a smart home as outlined by their proposed definition. Smart devices are offered at every price point, and many are controlled by the phone that most homeowners already have in their pocket. The Internet of Things (IoT) can be found in many aspects of our lives, from the rapidly-approaching future of self-driving cars to the ability to order dinner with just a few taps on your smartphone, but one of the most life-altering of these is the wide array of smart technology available for our homes.
And so, the home of tomorrow has become the home of today. Smart home technology is no longer just for the early adopters. With connected lightbulbs you can ask Siri to turn on, and smart thermostats that you can control anywhere you have internet connection, the life of the future is now more accessible than ever. The easy installation, followed by ease-of-use, that many of these smart devices boast especially increases the appeal and adoptability of the tech.
It’s not just luxury homeowners that are making these upgrades or expecting them in their next home, either. According to Realtor Mag, based on Coldwell Banker’s survey,
“Americans with an annual household income between $50,000 and $100,000 are adopting smart home technology at nearly the same pace as more affluent homeowners.”
The affordable price points of many of these smart devices increase their adoption rate and appeal. These small investments are making a big impact in homes throughout all price ranges, and are, in turn, making waves in the real estate market.
At their life spending peak between ages 35 and 44, Gen X is among the most connected when it comes to smart home technology. Millennials are a close second – rivaling Gen X with their desire but not their spending power, not to mention many of those aged 18-35 are still renting.
Even though many millennials are not yet ready to purchase a home, they are willing to spend more to rent a property with smart technology. But the difference between millennials and older generations lies largely in their smart tech choices: smart home tech users above the age of 65 are more likely to use a smart thermostat like Nest or Honeywell at 40 percent, while only 25 percent of millennials have one. Meanwhile, millennials prefer smart tech that offers convenience like smart lights and universal remotes for home entertainment, and Gen X tend to gravitate towards home security upgrades.
Of course, there are concerns to consider when taking the plunge into smart home real estate. Both real estate agents working with their buyers to prepare their home for market and those looking for a smart home for their clients must be aware of the ever present tech war and generational preferences. Is that device you’re installing HomeKit compatible, or does it play nice with Amazon’s Alexa? Would potential buyers be more interested in an August smart lock for the front door or some Philips Hue lights in the bedroom? In this often turbulent time of technological discovery and exploration, it’s important to do your research before diving in. What brings the most value to the buyers looking for a smart home in your community?
It’s a worthwhile question to ask. Studies by the Consumer Electronics Association and the National Association of Home Builders show that adding smart home technology can increase a seller’s closing price by three to five percent, not to mention it can sell a home faster. Just take a look at the numbers: 81 percent of current smart home tech users would prefer their next home to be smart, and 66 percent would be willing to leave their current setup in tact if they thought it might boost their sale price. And, according to the surveys and studies, it just might.
Smart homes are no longer the outliers in real estate – they are increasingly sought after and quickly becoming the norm. Expected to become a $130 billion industry by 2020, smart home technology is here to stay. This means that real estate agents looking to grow with the industry should not only brush up on the difference between Wi-Fi and Bluetooth, but also talk to their clients about their tech needs and preferences before the next showing.
Still, with all of the advances we’ve seen in smart home technology since we were introduced to the Jetsons 55 years ago, we still have quite a ways to go before we can check everything off on our smart home hopes and dreams list. Hey, at least we have another 45 years to go until 2062, right?