Survey: Smart Homes Not Making an Impact on the Real Estate Market
Consumers are continually bombarded with information about the latest smart-home technology, but has all that hype had a meaningful impact on American homes? According to RE/MAX, the changes to date have been noticeable but generally modest, at least in the Chicago area.
“We asked a sampling of our leading brokers what they were seeing out in the marketplace and were rather surprised to learn, despite all the marketing muscle that has been applied to smart home products, homeowners and home buyers are taking a cautious approach so far,” explained Chris Calomino, spokesperson for RE/MAX Northern Illinois.
What the RE/MAX brokers report is that while some smart home products such as thermostats are popular, few homes today truly meet the definition of a smart home, in part because that definition is something of a moving target.
Put as simply as possible, according to Calomino, a smart home is one that has multiple networked components that can be controlled by a smartphone or other internet-enabled device, both from anywhere in the home as well as from remote locations.
Like many of his colleagues surveyed about smart homes, Larry Fales of RE/MAX Advantage Realty in Antioch, Ill., said “smart home technology is only beginning to be adopted in our area. Smart thermostats lead the way because they appeal to people who travel a lot and to those who own second homes that go unoccupied for days or weeks at a time.”
Many homeowners are intrigued by the convenience and potential energy savings of smart-home technology, noted Bryan Kasprisin of RE/MAX Ultimate Professionals in Shorewood, Ill., but two factors discourage installation.
“The systems are not inexpensive, and many homeowners aren’t that tech savvy, so they decide to add hardwood floors instead,” he said.
But what happens if a homeowner opts to take the plunge? Will smart-home features enhance the value of a home or help sell it faster?
Rachel Hausman of RE/MAX Suburban in Buffalo Grove, Ill., is happy with the smart thermostat in her own home. Still, she views smart-home technology as “a nice feature but not a ‘must have.’ It’s more something keep on the radar for future salability and return on investment.”
In the heart of the western suburbs, Cindy Banks of RE/MAX Cornerstone in West Chicago, Ill., also sees relatively little demand for smart-home features.
“That might be different in submarkets with luxury homes,” she said. “Smart technology makes more sense in larger homes and for owners with higher incomes who may travel more for both business and pleasure.”
In fact, smart-home technology does seem to be winning converts.
It is increasingly common in newly built luxury homes on Chicago’s North Side, according to Matt Boemmel of RE/MAX Exclusive Properties, Chicago.
“Sometimes people get so excited about this stuff where the lights turn on as you drive up to your home,” he said. “It’s plug and play, and buyers really like that. With new homes priced at $1.4 million and up, I find builders will put the purchaser in touch with a contractor who will do home automation as an upgrade, so they can have as much or as little as they want.”
A similar interest in smart technology in homes with a more modest price tag can be found far from the city, according to Rebecca Hazzard of RE/MAX Rock Valley in Oregon, Ill.
“We’ve seen a revival of residential construction in our area, and many new homes have smart features,” she said. “Usually they will have an app that controls temperature, lights, garage door and locks, and is linked to a front-door video camera. Buyers love it. They joke about not worrying they’ll leave the garage open.”
As for resale value, a home with a full suite of smart features can command a pricing premium, reported Kim Keefe of RE/MAX Plaza in Woodstock, Ill.
“A listing we recently sold was retrofitted with smart doorbell and keyless lock, as well as lighting, a thermostat and a security system controlled by a cellphone. It sold for $10,000 to $15,000 more than a comparable home without those features and in just 40 days for cash,” she said.
It may, however, take a generational change to make the smart home truly widespread.
“Younger, tech-savvy buyers want smart features and are comfortable using them,” said Rita Neri of RE/MAX Premier Properties, Chicago. “As Millennials age into their prime homebuying years, smart technology may become the standard.”
Read more about smart and connected homes.