Buyers are willing to pay extra for ‘smart homes’
Kenneth R. Harney, August 24,2016
Could “smart home” technology – features such as network-connected thermostats, security devices, appliances and lighting – help you sell your home faster and for more?
Probably so, according to recent consumer polling data plus anecdotal reports from appraisers and realty agents. The key, though, is that the smart products need to be installed before you list your house, because most buyers in 2016 don’t want to have to install them on their own. They want things pretty much turnkey.
The latest in an ongoing series of research projects by Coldwell Banker Real Estate found that 71 percent of buyers out of a sample of 1,250 American adults want a “move-in ready” house, and that 57 percent of those buyers looking at older houses would consider them updated – and more appealing as move-in ready – if they have smart home features already in place. Fifty-four percent say that if they had to choose between identical houses, one with smart home tech, the other without, they’d buy the smart home. Sixty-one percent of millennials would favor smart tech homes, as would 59 percent of parents with children living in the house.
A massive survey of nearly 22,000 home shoppers by John Burns Real Estate Consulting earlier this year found that not only do prospective buyers rank smart technology high when they evaluate housing options, but they’re prepared to pay thousands of dollars for it. Sixty-five percent said they’d be willing to spend more for smart home technology packages, and well over half would pay extra for interior and exterior security cameras, network connected appliances, smart doorbells that send owners text alerts enabling them to check front-door security cameras, smart air filtration vents and a variety of other high-tech items.
Appraisers also are acknowledging the value of smart home technology and making what they call “adjustments” when they compare tech-enabled homes with similar, but tech-deficient, houses in the area. “Absolutely,” said Richmond, Va., appraiser Pat Turner in an interview. “Smart home technology can definitely add to market value. If you have the data showing that houses with smart technology sell for more, then you’ve got to” acknowledge that fact in some way in the appraisal report, he said.
For example, if local homebuilders show him that a house without significant smart technology sells for $200,000 but an otherwise similar higher tech house sells for $206,000, he has market data that allows him to make dollar adjustments (up or down) on other, comparable houses he appraises.
Danny Hertzberg, a Coldwell Banker agent in Miami, says from his perspective “a majority” of active buyers in the market not only prefer smart home technology “but they’re expecting it and asking for it.”
A few years ago, interest in home technology was confined primarily to the upscale, more expensive segments of the market, said Hertzberg. “Now it’s at every price point, whether in the center city or in the suburbs,” new construction and renovations alike. Even in houses built in the 1920s and 1930s, sellers are incorporating smart home packages into their renovations to appeal to today’s buyers. “It helps you stand out,” Hertzberg said. It gives you an edge over competing properties and it usually cuts the time needed to sell, he said.
But here’s an issue that’s beginning to bubble up- Now that the term “smart home” has become a hot marketing buzzword, is it subject to the same sort of overuse and hyperbole as the term “green”? Precisely what constitutes a “smart home” anyway? If you’ve got a Nest thermostat and some security gizmos, is that enough to make you “smart?”
No way. This past spring, CNET, the online consumer technology news site, partnered with Coldwell Banker to develop an industry standard- A true smart home should be equipped with “network-connected products (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.”
The baseline requirements- It’s got to have a smart security feature that either controls access or monitors the property or a smart temperature feature. Plus it should have at least two additional features from this list- smart refrigerators/washers/dryers; smart TVs and streaming services; smart HVAC system, fans or vents; smart outdoor plant sensors and watering systems; smart fire/carbon monoxide detectors and night lights; smart security locks, alarm systems or cameras; smart thermostats.
Now you know.
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