Will the “Connected Home” Rapidly Disrupt Residential Real Estate?

Disney's Smart House

Technology at the Consumer Electronics Show Aims to Create Smart Houses.

The Consumer Electronics Show (CES), happening this week in Las Vegas, is an annual gathering of inventors, enthusiasts, and the media to show off the latest in gadgetry. One of the biggest trends at CES this year is the slew of technologies aiming to create the “Connected Home.”

We’ve written about this before, though under a different moniker: “The Internet of Things.” We were skeptical then, but the enthusiasm at this year’s event suggests it’s perhaps going to catch on faster than we anticipated.

The New York Times summarized the movement in a recent article. While CES does not usually exhibit major technology companies, the article points out, many of the world’s most recognizable brands—Sony, Apple, Google, Verizon, for example—nevertheless must integrate with the devices of the connected home. These companies provide the software platforms on which the services run, make the hardware that support connected home software, and provide the telecommunications services that allow them to be connected That adds, of course, both credibility and security concerns. No one wants a stranger to be able to turn on their air conditioner without warning.

The Connected Home is Nothing New

While CES is the current center of hype for connected home technologies, the movement has germinated for some time. Smart thermostats, for example, have been around for about five years. And let’s not forget Disney’s Smart House. 2015, though, may be the year in which some degree of connectivity becomes not a revelation to a home buyer but an expectation from him.

An executive at Los Angeles-based KB Homes, one of the country’s largest home builders, discussed the growing demand for the connected home in residential real estate in an April at the Silicon Valley Business Journal. He saw an increasing desire among buyers not for gadgets that did anything new, but systems that help to monitor the house itself: dashboards that show energy consumption, whether the kids are home from school, and can close the garage door from a distance. For over a year, KB homes has included an internet-enabled home monitoring system in every new home. Read the full interview here.

Three Agent Considerations about the Connected Home

1. New Construction will be more and more likely to be labeled as “connected homes.” Agents and brokers should familiarize themselves with the dominant technologies, as they appear. Most connected home dashboards, for example, take the form of a smartphone app. If you see your buyer pull out a flip phone, she might not be impressed with the remote control door locks. But if they haven’t put down a tablet since you met, they might want to hear about solar monitoring features.

2. Existing homes pose a different consideration. There’s not enough data, yet, to determine whether it’s valuable for a seller to better connect his home with smart appliances. The biggest consideration at the moment is whether connectivity will save the buyer money in the long run, and how much. For this reason energy consumption monitoring platforms are the most prevalent connected home technology today.

3. Generational expecations are also important. We’ve written before on how enthusiasm for a surge of millennial home buyers is perhaps overblown. This is the demographic, of course, most likely to demand such features—as a mobile and tech-savvy generation, remote monitoring is more important than ever. Of course, they’re also more likely to desire an exposed-brick pre-war loft in the city; not the easiest home to connect.

Posted in Real Estate News, Real Estate Tech

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