Not long ago, the only requisite to connect to the internet was a phone line. New buyers, particularly looking for high end homes, have more stringent criteria today. They only want to buy a home in an area that has access to high speed internet and they want a strong cell phone signal at home. I an otherwise perfect house, missing those two features could be a deal breaker.
Poor Connectivity in a Connected Age
Over 80% of homes in America have a broadband internet connection. Across all income brackets, internet access has become a key to communication, entertainment, and even employment.
For middle class and higher end home buyers, having this type of high speed connection is a “must have” for a home purchase. The FCC says broadband starts at 25 mbps, or 25 megabits per second download speed.
The United States is a large, geographically dispersed country. While getting broadband speeds in urban areas is easy, higher speed capacities have yet to reach some suburbs, smaller towns, and rural areas. That can make selling homes in those areas a challenge.
While in places like South Korea internet speeds under 1 gigabit per second (that’s about 1,000 megabits per second) is the norm, in the United States large companies like Comcast, Cox, Charter, AT&T, Verizon, and CenturyLink sometimes bring speeds that hardly meet the broadband threshold, if at all.
Poor Connectivity in Real Estate
At the end of a hard day in the office, people like to come home, have dinner, and cuddle up on the couch with Netflix, Hulu, or one of a list of competing video streaming services. The kids might like to play online games on X-Box live, and the parents check in on email, investments, and Facebook. All of these activities use bandwidth.
Buying a home today, most of us assume that high speed internet is available. However, as we discussed above, that is not true in some small towns, suburbs, and rural areas. Even further, cell phone signals may be weak in some of those areas, keeping high speed smart phones from working as fast as possible, if at all.
What does this poor connectivity mean for real estate? Lower home prices where broadband and high speed cellular service are not available.
Which Homes Does Poor Connectivity Impact Real Estate Sales?
Poor connectivity can certainly make homes more challenging to sell, according to an article from Vermont’s Seven Days. Isaac Chavez, the CEO of Vermont Realtors, indicated that for home in the $300,000 to $1 million range in a higher end area, buyers typically have the means to make up for a lack of broadband.
In homes in the $300,000-$500,000 range in less wealthy areas, or more rural ones, buyers may simply look elsewhere if high speeds are not available. Even more, however, is the issue of cell phone coverage in remote areas. In those areas, a lack of signal can be a safety concern.
The dollars and cents are tough to quantify, but the trend is real. Appraisers look at cell phone and broadband coverage when determining home values, and real estate agents and home buyers should be aware of the trend as well. You don’t want to move into a new home and not be able to stream Netflix. Do your homework in advance to avoid any surprises.