CHICAGO – We are now living with millions of internet-connected devices. Literally. Year after year, more companies introduce more smart home devices – think Alexa, Ring cameras, smart appliances, smart thermostats – and those devices interact to make homes more comfortable and household tasks easier and convenient. These internet-connected devices –parts of the Internet of Things (IoT) – are making homes more intelligent. And with smart homes comes the need to be smarter about marketing and selling them.
There’s a long list of smart home devices that make life better and help owners enjoy, maintain and even clean their homes. Some of the most popular include smart thermostats and smart lighting, which can remotely adjust the environment throughout the day. Voice assistants can control IoT devices and manage household tasks. Smart locks and garage door openers can detect when residents are nearby and open remotely, and, more importantly, deny access to anyone else. Smart security cameras and systems let homeowners monitor their homes from anywhere and can detect the differences in activity between occupants, visitors, pets and suspicious characters. Smart monitors can detect power surges, carbon monoxide levels and turn off water remotely to prevent freezing pipes or plumbing failures.
Growth and value of smart homes
The global smart home market was valued at $81 billion in 2022. By 2030, it is projected to balloon to $338.28 billion. By the end of this year, the number of smart homes is expected to exceed $400 million, which means that consumers are not only increasingly adopting smart home technology, but they will be looking for it when they buy homes.
In addition to comfortable and convenient living, there are several financial benefits to consumers who add smart technologies to their homes – for example, smart thermostats and appliances can maximize energy efficiency, smart security systems can potentially lower homeowner insurance costs, and tech-enabled homes have better resale value. Some estimates indicate that sellers who invest in smart home technologies realize a 50% return on those tech investments(link is external).
Opportunities for real estate
And here’s why this is so important: All these smart home devices generate data, which creates opportunities for agents and brokers. But the real estate domain has not yet fully capitalized on the data generated by smart home devices. Data from these devices can reveal how much energy a home uses and when, which rooms are most used, room dimensions, even finishing materials and more. This information can make a property more livable, but also more marketable.
Real estate professionals who invest in understanding how to use and maximize the benefits of smart home technologies and the data can create competitive business advantages – especially when pricing, marketing and selling smart homes.
In the very near future, it will be common for people’s smart hubs to predictively adjust home thermostats, turn on selected lights and even play relaxing music in anticipation of their arrival – all based on their car’s location during an evening commute. It’s important for real estate professionals to understand how – as well as which – technologies are used, what capabilities exist in a smart home, and what data is generated by in-home IoT devices. This information can drive how to showcase, market and sell those home features.
Tech-savvy buyers want tech-enabled homes
Home buyers are increasingly tech savvy. Currently, some of them even arrive to view properties in cars that can drive themselves. And buyers who use IoT devices in their current living spaces tend to choose smart homes over homes that are not tech enabled.
In today’s market, automating homes can build equity and smart home features can help a home sell faster, at a higher price. IoT devices have been shown to increase a property’s resale value by up to 5%(link is external). And current research indicates that 77% of home buyers are interested in smart homes.
Considering that roughly half of millennials use smart technologies(link is external), and they are the largest demographic of potential home buyers, it’s not surprising that almost 90% of millennials are willing to pay more(link is external) for the benefits smart homes offer. And though possibly less tech-savvy, 65% of baby boomers report a willingness to spend more on properties that are IoT-enabled, which is a sizable market.
The expectation is that these tech-savvy home buyers will continue to evolve and shop for sophisticated, tech-enabled homes. Homes loaded with IoT devices will be in higher demand because buyers understand that they will better enjoy the house, and it will make their lives more convenient. They will also expect the buying, selling and living experiences to be improved by technology.
Smart homes, smart agents and brokers
Today, everything is smart and getting smarter—homes, cars, appliances, devices. The future of home design, features and amenities is intelligent. The savvy real estate professional watches these trends, learns and uses all the information that can be gathered from smart home technology to inform buyers, market and sell properties, and benefit from these evolving technologies. Smart homes are bringing unexplored value to the real estate market. Smart agents and brokers will capitalize on that and bring more value to their customers and businesses.
© 2024 National Association of Realtors® (NAR)
