Smart homes, it seems, are all the rage. The worldwide market for such houses may hit $53.5 billion by 2022, according to data from Statista, and the total number of smart homes may pass 300 million by the year 2023.
As global interest in these types of dwellings rises, it may be in the best interest of buyers and sellers alike to understand more about smart homes and their place in the market.
This article will provide an overview of the defining facets of smart homes, along with additional information about how smart features can affect a property’s value.
What are Smart Homes?
Flash back just a few years, and the definition of “smart home” was a loose one. Seeking to bring clarity to what exactly differentiated smart homes from other types of properties, tech website CNET helped developed a standardized set of criteria:
- The home is equipped with network-connected control devices, designed to manipulate home functions through direct user input or automation.
- The home must contain at least three smart features, one of which must be smart security capabilities or smart temperature functionality. The list of additional qualifying smart features includes lighting, safety detectors, entertainment, appliances, temperature control, and outdoor sensors.
Going further, home automation experts like Demetrios Barnes argue that it’s not enough to just litter a home with a few purportedly smart devices. You’ll also need to take connectivity, integration, and end-user benefit into consideration when evaluating what makes a smart home worthy of the designation.
Take, for example, the rise of devices like smart beauty appliances. They’re impressive when evaluated from a standpoint of skincare innovation, as they can optimize your grooming routine and streamline your beauty solution purchases.
Barnes notes, however, a security feature like a digital lock is far more representative of a smart home hallmark. The ability to control a door remotely, provide access to specific parties, monitor entryways, and integrate with other systems throughout the home offer clear-cut homeowner value and functionality.
Lastly, in defining what constitutes a smart home, you’ll want to take into account the differences between wireless and hardwired systems.
Wireless systems generally consist of an assemblage of individual smart products — a piecemeal solution with various components. This is the cheaper route but can result in a system that isn’t as seamless, sophisticated, or secure as a hardwired system.
Wired systems, on the other hand, are typically more reliable but require a greater investment of time, money, and effort to properly configure, remove, or upgrade.
Do Smart Features Matter When Buying or Selling?
Easy living and convenience might be the most recognizable benefits of smart home technology, but potential homebuyers and sellers should also keep in mind how smart features might affect their finances and the overall value of a home.
Most homeowners realize that the right smart features will grant some cost savings, mostly by regulating how much water and energy your household consumes. The more ambiguous question, though, is whether or not investing in smart home technology can augment a home’s value when it comes time to sell?
Speaking with New York Magazine, real estate agent Angel Piontek makes it clear that you should assess the value added by smart home technology on a case-by-case basis. A smattering of lower-end smart home add-ons, for instance, may not do much in the way of increasing a sale price. A home-wide, hardwired automation system, on the other hand, has a better chance of enhancing that final dollar amount.
More importantly, though, is the fact that even in cases where smart gadgetry doesn’t increase the sale price of a home, it might still work to make that home more attractive to prospective buyers. Recall that, integrated properly, smart features improve a home’s overall convenience. Savvy sellers can use that as a strong differentiating factor to set their home apart from others that are on the market.
Making the Most of Smart Home Technologies
If you’re planning on using smart home systems as a “hook” to lure in eager homebuyers, you should do so knowing who the target audience for such technologies is. Millennial homebuyers, as it would so happen, are more likely to see the value in automated home systems than older generations.
Several smart home technologies appeal directly to millennial buyers. Knowing these will allow you to plan for the integration of smart features that have a higher likelihood of helping sell your property.
Wireless cameras, for instance, offer a remote monitoring option to homeowners, one that fills the need for security that Millennial buyers place a high value on.
Similarly, energy-saving features like smart thermostats perform the dual task of cutting energy costs and lowering a home’s energy footprint — both of which are of great concern to younger generations of homebuyers.
Be sure to stay abreast of which smart home integrations are most popular with younger families if you’re looking to use these features as a selling point in the future.
The market for smart homes is growing, so both buyers and sellers should be aware of what this term means and how it might come into play during a home sale.
While smart features on their own won’t automatically raise the price of a home, their inclusion can serve as an additional selling point for the right kind of buyers.
Finally, those who wish to benefit from integrating smart features into their property as a selling hook should do their best to understand the buyers who are most willing to spend extra on smart technologies, along with the specific features they value most.