Is a smart home really that smart when it comes to housing value? It appears so.
Maybe your house is one of the 15 million smart homes in the U.S. (as of 2016, according to S&P Global Market Intelligence). Likely it’s not — that number only encompasses 12.5 percent of US homes, and even with the popularity of Amazon’s Alexa and Google Home on the rise, that percentage is only predicted to grow to 28 percent by 2020. Still, that prediction is only a few percentage points away from a third of US homes — and when you think of it that way, that’s a lot of smart homes, even if they are outnumbered by the “dumb” ones.
If you don’t have smart technology, you probably want your home to have it. In fact, according to TechZone360, Wakefield Research claims that a staggering 86 percent of Millennials are willing to pay more for a house with smart technology. The same research claims that 65 percent of Baby Boomers said they’d pay more for a house with smart tech, and they’ve long controlled the housing market.
At the same time, Millennials say they’d drop an extra 20 percent a month just to rent real estate with smart features. The Washington Post cites a survey by Coldwell Banker Real Estate, which reports that 71 percent of buyers in a sample of 1,250 American adults want a “move-in ready” house, and 57 percent of 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.” Basically, people want smart homes: and usually, they’re willing to pay for them.
Making A Home “Smart”
But what does “smart” mean? Can you just stick a Nest thermostat on the wall and call your house smart? Not anymore. Millennials, say TechZone360, see that thermostat as a given. They also want their house to be stocked with a smart watering system and smart doors and locks. They want to save energy, both to save money and to help the planet, and they want the ease and convenience of tossing their keys and having something harder to break into than a traditional keyed door.
Consumer Reports says that Millennials also like programmable lights and security systems. These things, they claim, can bump the home value 3 to 5 percent “for a home with the right amenities.”
The Washington Post also noted a 22,000 person survey of home buyers by John Burns Real Estate Consulting. In that survey, 65 percent of buyers said they’d pay more for smart home technology packages. And “well over half would pay extra for interior and exterior security cameras, network-connected appliances, doorbells that send owners text alerts enabling them to check security cameras, smart air filtration vents and a variety of other high-tech items.” A Coldwell Banking realtor in Miami told the Post that not only were people willing to pay more for smart tech, they were actively asking for it and seeking it out.
But if these things are adding value to the house — with all of the worries they bring with them, including concerns about hackers, and incompatible devices, plus, in some cases, expensive service plans — how are they doing it? Well, the first reason is that they’re safer.
Smart homes have security cameras to see who’s at the front door. They have smart smoke and carbon monoxide detectors. You can lock and unlock them from afar, which is convenient in any number of situations when someone needs to get into your house and you’re not home.
They also save money. Smart thermostats save, Security Sales says, anywhere from 10-12 percent on heating and 15 percent on cooling. Which means the thermostat pays for itself in less than two years. Also, even if people aren’t actively paying more for smart homes, smart homes may spend less time on the market. Says a Miami-based realtor to Reviewed.com, “Having that technology there focuses attention of buyers to that house over others … and often I’ve seen those homes sell significantly faster.”
Many people mention wanting electronic security devices on their smart homes: not just smoke and carbon monoxide alarms, but also standard security systems. Not many realize that a security system actually increases the value of your home — and it doesn’t have to be a smart one, either. You can also often get a discount on your home insurance if you have a security system installed — sometimes up to 20 percent — which is a discount that can carry over to the home’s buyers.
But smart security devices are really the next frontier in home security. They not only allow you to monitor your house for unwanted intruders, but they also let you see who’s knocking at your door — on your smartphone.
As My Alarm Center points out, you can tell when your kids get home from school. You can monitor your pets remotely, if you’re into that sort of thing. You can see if packages were left at the door. If synced with a smart lighting system, you can turn the lights on and off while you’re on vacation. You can also buy a system that detects moisture in the air — from burst pipes — and radon gas. Smoke and carbon monoxide detection can be rolled into the same system. All of these items can work to keep you, your family, and your property safe — especially when combined with smart locks, which are harder to break into than traditional locks.
Of course, your security system doesn’t have to be a smart system to add value to your home. A regular hardwired alarm system, especially when combined with security cameras, can add value to your home for buyers who appreciate those features. The same goes for smart tech: it will add value to your home — for buyers who want and appreciate it. You can’t rely on a new paint job to bump up your asking price, and you can’t fully rely on either smart tech or a home security system to increase your home’s selling price.
But just like that paint job, there’s a good chance it will help.