Today, we’re surrounded by so much remarkable technology that it can be easy to take it all for granted. But when you take a step back, it really is incredible to observe how far we’ve come. For instance? In homes around Chicagoland today, people are controlling their lights via smartphone, ordering dinner by talking to a speaker, and creating shopping lists by typing on their refrigerator door’s touch screen.
These amazing features are all examples of smart home technology. Smart home technology — a category that includes smart lighting, entertainment, security, and HVAC systems — employs internet connectivity and machine learning to help streamline operations, making it easier for users to automate and control their favorite devices. Often, smart home systems also offer increased security features, and may be more environmentally friendly than other types of home tech.
Here in the Chicagoland market and around the country, smart home technology is on the rise, and it’s a trend that’s only set to keep growing in the months and years ahead. In fact, reports predict that the value of the smart home industry will reach $130 billion between 2020 and 2025, according to REALTOR Magazine.
One research firm projects that “1.3 billion smart devices will ship worldwide in 2022, twice as many as in 2018,” according to the Chicago Tribune. And data from Statista estimates that there will be nearly 31 billion connected smart devices worldwide in 2020, up from 26.7 billion in 2019.
Smart home technology is changing the way that many people live. But is it also impacting the world of real estate? Let’s dive into three big FAQs about smart home technology and real estate, for buyers, sellers, and agents:
Does Smart Home Tech Impact Home Values?
A small but growing body of research suggests that, under the right circumstances, smart home technology can help lead to higher sales prices.
REALTOR Magazine, for instance, notes that 44 percent of millennial buyers say that they’re willing to pay an extra $3000 or more for a home with smart features. Similarly, agents and brokers polled by the research firm T3 Sixty say that smart home tech can influence pricing, with 78.8 percent noting that buyers may be willing to pay more for smart homes. Another survey of home shoppers, brought to our attention by the Tribune, notes that 65 percent “said they’d be willing to spend more for smart home technology packages, and well over half would pay extra” for features such as security cameras, smart doorbells, smart air filtration systems, and more.
With that said, it’s important to recognize that no two home sales are going to be exactly alike. There are many different factors at play, including comparable listings nearby, local market trends, and the specific types of smart upgrades and features that come with the home. Depending on the circumstances, connected devices and home automation may be a factor when it comes to pricing, but there will always be plenty of other variables that contribute just as heavily.
Is Smart Home Technology Affecting Sales?
Smart home features may directly influence the price of a home. But even more importantly, this technology may impact other, less tangible aspects of a home sale, including time on market, audience interest, and more.
Survey data from T3 Sixty reveals that four in five brokers and agents (82 percent) believe that smart home technology can help “streamline” a home sale. For some buyers, a home with smart features may stand out compared to other listings, giving it an edge and, perhaps, leading to a shorter timeline overall.
In other cases, marketing a home with smart features may help draw in a bigger, and more eager, prospective audience. A 2016 report from Houzz, for instance, found that “nearly half of homeowners are installing smart systems or devices during their renovation projects,” and that those who renovate with smart upgrades “are more likely to report high levels of satisfaction… compared to those installing devices without mobile connectivity.”
With smart home technology top of mind for so many, prospective buyers may be more interested in a turnkey home that comes with smart features ready to go, rather than having to take the time and effort to add smart devices and systems themselves. Indeed, real estate information site Inman notes that “70 percent of homebuyers said they would want” smart features — like smart thermostats, smart fire detectors, and smart carbon monoxide detectors — to come “pre-installed in their next home.”
What Types of Smart Features Are Buyers Looking For?
According to data brought to our attention by the Chicago Tribune, more than half of potential buyers (54 percent) say that “if they had to choose between identical houses, one with smart home tech, the other without, they’d buy the smart home.” What’s more, 61 percent of millennials would favor homes with smart tech, as well as 59 percent of parents with children.
But among this group, what smart home features hold the most importance? According to Houzz, among those renovating their homes, new smart devices and systems are most likely to be added “as part of home security or safety upgrades, followed by entertainment, climate, and lighting upgrades.” With that said, however, Houzz also notes that smart thermostats “are the single most popular smart device in a renovated home.”
These findings line up with those from REALTOR Magazine, which notes that consumers find smart security and thermostats to be the most appealing smart features, and may “add the most value to a home sale,” as a result. However, more than a third of people also find smart appliances appealing, and 29 percent say that smart entertainment systems are enticing, according to REALTOR Magazine.
Another survey, from Better Homes & Gardens, found that millennial home shoppers prioritize smart home technology that “makes their home safer and enjoyable,” with “indoor and outdoor lighting, door locks and security cameras” as the features that people are most likely to adopt.
What Can Brokers Do to Leverage Smart Home Technology?
As smart home features continue to grow in popularity, this new area of technology can provide ample opportunities for real estate professionals. As a T3 Sixty survey notes, a vast majority of brokers (91.3 percent) say that they could benefit from integrating smart home technology into the marketing of a home. On the flip side, among consumers, about half of all Americans “think their agent should be able to help them ‘smart stage’ their home with the latest smart home tech,” according to Inman.
In short, this new technology is an opportunity for real estate brokers to continue doing what they do best.
Smart home technology can be used effectively in the marketing and staging of homes. Brokers and agents can offer their expertise on this important subject as a way to add value to potential clients, and connect with new leads who may be interested in talking tech. And finally, brokers should stay on top of the “best practices” for smart home technology, so that they can continue to counsel their clients on the best way to use this technology during each step of the real estate process.
How Baird & Warner Makes It Easier
Want to talk smart home tech with a broker near you? Baird & Warner agents are hyperlocal experts who know just what it takes to help make the dream of home ownership easier. With thousands of agents in 30 convenient offices located all around Chicagoland, it’s never been easier to start bringing your biggest real estate dreams to life.
Whatever your thing is, we get it, and we can help put you in the space that will truly work for you. And with our signature “One Company” approach, Baird & Warner can help streamline every step of the home buying process, with mortgage and title services all readily available under one roof. From buying to selling to financing, easier is just in our DNA, as it has been since 1855.
Have any more questions about the future of buying or selling? Ready to start using our cutting edge tools to explore the Chicagoland market? Find your local Baird & Warner agent today to get the conversation started.