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What is a Smart Home? The Future of Residential Real Estate

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I really don’t like getting up in the morning. It’s probably one of my least favorite things to do, aside from meetings.

How_Smart_Homes_Will_Revolutionize_Residential_Properties

Still, I will say that nothing soothes the morning blues quite like a cup of hot coffee. All cream. No sugar.

Unfortunately, I don’t have one of those programmable coffee makers. Even if I did, I’m sure I’d be terrible about setting it. I can’t count the times I’ve mixed up AM and PM on my alarm clock.

But just imagine if the mug was already there, waiting for me in the morning. Imagine the blinds opening by themselves to let more light in, making it easier to get out of bed. (Kidding about that last one. Getting up will never be easier.)

Think about it:

Imagine living in a house that automatically locks your doors at night, turns off the thermostat when you open the windows, or dims the lights and turns up the volume when you’re watching T.V.

What if your dinner, hot and ready, was waiting for you when you got home?

I. Just. Can’t.

Get ready. This dream is already a reality. Wake up and look at the world around you.

In the real estate sphere, smart homes are taking off and are infiltrating the mainstream market, with 45% of Americans saying that they have or are planning on investing in smart home technologies.

Clearly, real estate software was just the beginning.

But what are smart homes and how exactly are they changing the market? Will they affect property values and would you even want to sell one in the first place?

I’ve got all the answers for you, but first let’s have a rundown of what a smart home can do.

What is a Smart Home?

The latest technology trends always sound cool, but it’s important for industries to know if the idea will stick. What something does far outweighs its trendy hashtag.

So let’s start with your first question: What is a smart home?

According to Coldwell Banker and CNET,  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.”

A lot of tech here, so let’s look at some examples:

Ever seen one of those home security commercials where you can control your system through your phone?

That’s an example of a smart home.

With smart home technology, you can forget to close your garage door or even activate your security system altogether.

Instead of that quick panic attack when you just remembered that your garage is wide open, all you have to do is tap into an app and down goes the door. No extra gas or heart palpitations required.

Smart homes operate around something called the Internet of Things (IoT), a new term in the tech world that is changing our everyday life.

In the example above, the Internet of Things is how your phone is connected to other technologies in your home. IoT can be as simple as a tablet that can lower your thermostat and turn on your ceiling fans.

In a way, your smartphone or tablet quickly becomes a remote control for your home.

How Smart Homes Affect Property Values

Now that you know what a smart home is, you may be wondering what this will do to property values.

Building on results from the 2016 Coldwell Banker survey, Realtor Mag states that “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.”

In other words, smart home technology isn’t just happening for the wealthy elite. Mainstream homeowners are also just as interested in the latest real estate technology. Likely, this is because of consumer accessibility with products, such as the Amazon Echo, which works in sync with Alexa Voice Service, who’s a bit like Siri but for your home.

However, some are opting for more built-in solutions—something that could have a serious ROI.

For example, let’s say you decide to spruce up a property with some smart home statements. Maybe things like automated porchlights, a thermostat that turns on as soon as you walk in, or even lights that automatically turn on when you go from room to room after a long day’s work.

These are all minor things that can have a big impact. They’re also small investments with a big “wow factor.”

Still, I know you want to see the numbers.

Because of the newness of smart home technology, there aren’t any hard and fast statistics. However, that doesn’t mean it won’t be a good investment in the long run.

Continuing with Coldwell Banker’s findings, there’s evidence to suggest that many homebuyers believe smart technologies may make their homes sell quicker. Specifically, “more than half of homeowners (54%) would purchase or install smart home products if they were selling their home and knew that doing so would make it sell faster.”

For now, anecdotal evidence alone supports this theory.

Real estate agent Hal Feldman relayed his own experience to Reviewed.com, stating, “I don’t necessarily see these features raising home prices, but having that technology there focuses attention of buyers to that house over others. And often I’ve seen those homes sell significantly faster.”

Seems worth it, especially if you have to make a quick sale.

Why You Should Sell Smart Homes

Now, smart homes sound great, but you’re a real estate agent after all. Why should you take a chance on selling them if the tech doesn’t guarantee a high property value?

Because they’re the future of real estate.

Hear me out:

We live in a world where people can’t separate themselves from their phones and spend hours on Facebook everyday. I even spend my work day on a laptop writing about technology.

There’s no escape. People expect technology.

I’ve seen toddlers with smartphones and grandmothers with their own YouTube channels. Technology permeates every demographic. It’s ingrained in our daily lives.

Already, Coldwell Banker found, “40% of Americans aged 65 or older who already own smart home products say they have smart temperature products, compared to only 25% of millennials.”

And that’s just one smart home element.

For those without smart home technology, “more than one in four (27%) say they will incorporate it into their lives in 2016.” Don’t forget that 2016 is almost over.

As a real estate agent, you know that you have to be a chameleon in a changing market. Young people are flocking to smart home technology; Coldwell reports 72% saying they’d spend at least $1,500 or more for smart home tech and even 44% reporting they’d spend upwards of $3,000.

With more homebuyers showing interest in smart technology and a new generation that will soon expect it as a common staple of home life. It’s up to you to remain stuck in the past or evolve with your changing market.

More?

What obstacles do you see when selling a smart home? What amenities do you think homebuyers will value? Let me know in the comments below.

Looking for Real Estate Agency software? Check out Capterra's list of the best Real Estate Agency software solutions.

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About the Author

Jennifer Champagne

Jennifer Champagne is a writer for Capterra, specializing in IT, hospitality, and real estate management. In her spare time, she enjoys reading and spending time with friends and family.

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