Ever since the first internet-connected toaster was unleashed on the world in 1990, people have been heralding the coming age of connected devices and appliances. Called the Internet of Things, its time has finally arrived, and it’s taking the real estate market by storm.
Indeed, smart technology is the latest and arguably most important trend in home building. As the Internet of Things becomes more widely accepted and a more tech-savvy generation enters the market, homes without the latest gadgets risk being left behind.
Separating fact from fiction and hype from truth, what does the increasing prevalence of smart home designs mean for the market?
A Smart Home Is a Smart Move
For quite some time now, experts have predicted that 2020 would be the year when the smart home went mainstream. If recent trends are any indication, we’re right on track, if not ahead of schedule. With almost half of Americans already using smart technology or planning to invest in it this year, it’s safe to say the future is now.1
These days, builders who want to remain competitive turn to the Internet of Things. Not only does an increasing percentage of consumers expect state-of-the-art technology in their homes (more than two-thirds of homeowners now say they want to control their home remotely); many also say they will pay more for a home that’s wired. Perhaps that’s why one-third of all U.S. home builders have reported revenue increases after installing home technology.2
Who Wants a Smart Home?
The Millennial generation is partly responsible for the greater demand. Already, 43 percent of Americans who own smart home systems are between the ages of 18 and 34. The younger generation, which now represents the largest consumer base for the housing market, is also willing to pay more to install such products.
That being said, Millennials can’t get all the credit. Their elders are driving demand as well, only their choices tend to be a bit different. Older Americans, for example, are quicker than their younger counterparts to adapt certain types of technology, such as smart temperature products.
Finally, when it comes to income, all classes seem to be created equal. The same Coldwell Banker study that revealed the importance of the Millennials also shows that those who earn between $50,000 and $75,000 adopt smart home technology at nearly the same rate as those who earn between $75,000 and $100,000.3 That’s as great a sign as any that smart homes have become the new normal.
Thinking Smart about Smart Devices
From thermostats that know when you’re home to sprinklers that automatically adjust to the season and weather, there’s a smart device to suit every need. With such an abundance of options, discernment is the name of the game.
So, which installments will actually increase the value of a home? What do buyers really want? The truth is that any piece of technology can increase the value of a home, but not every smart device is created equal. That’s because consumers prefer some improvements more than others.
When thinking of a “smart home,” most Americans think of a house that is equipped with home security systems such as home surveillance technology, temperature control, lighting fixtures and safety features such as carbon monoxide detectors.
The technology that most appealed to potential homebuyers, however, was smart security. Of those surveyed, 58 percent said pre-installed home security systems would be the most appealing feature of a new home. Coming in a close second at 56 percent was temperature control.4
The Possibilities Are Endless
Preferences aside, any addition is a good addition. In fact, most people don’t consider a home to be “smart” unless it has at least three different types of smart products. That means that builders or current homeowners should be thinking big rather than small. If the surveys show anything, it’s that scrimping on smart technology isn’t the way to impress potential buyers.
That will be even more true in a few years. With more and more Americans adapting to the expanding Internet of Things, the demand for smart home technology will only increase. Before long, a home that doesn’t feature smart technology won’t be considered much of a home at all.