Smart Homes now represent the majority of homes in the United States, with more than 54% of homes owning a smart device of some sort according to data collected by Smarter Analytics.
Does a Smart Home Increase Your Home Value? A Smart Home Will Increase Your Home Value. Smart homes will have a higher value than comparable homes without smart devices and generally sell faster. Consumer Reports estimates that a smart home can increase resale value by up to 5%, while other research suggest up to 11%.
A 5 – 10% increase in value on your house is a pretty nice perk for doing a few fairly simple, and not too expensive upgrades. According to Zillow.com, the median home value in the United States is about $250,000. You could potentially sell your home faster and get an extra $25,000 (That’s 10% of $250,000) in your pocket just from following the advice in this article. Seems worth the eight minutes to me.
What is a Smart Home?
What is a smart home? It seems like a fairly simple question, but you’ll get a different answer depending who you ask. I wold define a smart home as a house with at least a few devices that help save energy and time, as maybe even improve security.
Coldwell Banker, a leading real estate company, defines a smart home as “a home with a minimum of three smart devices, with at least one featuring a smart security or smart temperature function.”
At the 2019 Consumer Electronics Show, Coldwell Banker and CNET used this definition. ““Smart home: A home that is equipped with network-connected products (aka “smart products,” connected via Wi-Fi, Bluetooth or similar protocols) for controlling, automating and optimizing functions such as temperature, lighting, security, safety or entertainment, either remotely by a phone, tablet, computer or a separate system within the home itself.”
In summary, a smart home is a system of devices that allows a homeowner to control certain features of their home remotely, and as a way to automate functions of a house, such as temperature and lighting. Here are the five main categories that smart devices can be broken down into
Security
Smart Security Systems are represented in 59% of smart homes. They are the market leader and are still one of the fastest growing segments in the smart home market. Security cameras provide a way to remotely check on your house, your pets, and anything that might be going on in and around your house.
Entertainment
What’s a smart home without some kind of smart entertainment to entertain you and your guests? The most popular item in this category is a smart speaker, or a set of smart speakers. They can be set to play your favorite music in whatever room you walk into and “follow” you around the house. They can also be programmed like alarms to start playing music at a given time.
Lighting
Lighting can be closely tied to the entertainment category, but it is also so much more than just entertainment. Entertainment is just a subset of the lighting category. Lighting sets the atmosphere no matter the occasion. There is so much that can be done with lights, from turning on when someone gets home, to changing color based on time of day or if you are watching a movie.
Temperature
Who knew that a thermostat could be fun and cool? Smart thermostats are one of the most in demand smart devices, just under security systems. They are represented in 45% of smart homes. Smart thermostats are able to automatically adjust the temperature to your perfect level, all the while saving you money. They can also turn off the system if you are not present at home. They can also do the opposite and start getting the house ready temperature wise for when you are getting close to home.
Voice Control
Probably one of the most well known smart home features is being able to control your smart devices with just the sound of your voice. Think Alexa, Siri, or Google Assistant. Most commonly built into smart speakers, but they can be found in other types of smart devices as well, such at smart thermostats and smart switches.
Smart Home Tech in the Home
In 2010, according to IHS Tecchnology, only 0.5% of homes in North America had smart home tech. Thinking back to 2010, I didn’t have any smart home devices, and Amazon’s Alexa was still four years away.
According to research firm T360, only 12 percent of homes had smart home devices by the end of 2017. That represents the early adopter phase. I mentioned earlier that smart homes are now the majority of homes. Didn’t take long to get there, did it?
What do home buyers want?
The 2018 Coldwell Banker Real Estate Smart Home Marketplace Survey asked respondents “What smart products would potential home buyers prefer to have pre-installed?”
The results were as follows:
- 77 percent would want smart thermostats pre-installed
- 75 percent would want smart fire detectors pre-installed
- 70 percent would want smart carbon monoxide detetectors pre-installed
- 66 percent would want a smart camera pre-installed
- 63 percent would want a smart lock pre-installed
- 63 percent would want a smart lighting system pre-installed
The survey by Strategy Analytics revealed the following desired features in a smart home:
- Easy to use
- Feeling more secure
- More peace of mind
- Convenience
- Helps to manage the household
- Saves time
The two surveys seem to correlate well, although ease of use is hard to measure. The top desired smart devices relate to feeling more secure and having peace of mind while home or away. They also help to manage the household and are convenient to use, such as a smart thermostat or smart lock on the front door.
What Stops People From Owning Smart Home Devices?
The top three reasons that stop people from owning smart home devices are Affordability, Security, and Lack of Knowledge.
Price/Affordability
The top reason that people don’t have smart devices in their home is because they can’t afford it. Some people report waiting for the price to come down. The good news is that smart devices continue to drop in price for quality products. Also, many utility companies provide rebates for purchasing a smart thermostat, making them affordable, and in some cases, free.
Security
The second largest reason that people don’t own smart devices is that they are concerned about security. They are concerned that someone else could access them, and that’s a very valid concern.
Think of a smart lock for example. Your house can just be opened up with the twist of the door knob if your smart lock gets hacked. That said, old fashioned door locks can be picked and opened up as well. Anyone with the right knowledge can gain access to your house.
Their are numerous other security concerns as well, such as a hacker watching your smart cameras, or turning on and off certain devices, or opening a garage door. The list is nearly endless, and you have to weight the pros and cons of each device yourself. In addition to that, I would recommend a strong password.
Lack of Knowledge
I don’t mean for that to sound harsh, but the third biggest reason people don’t have smart devices is that they just don’t know much about them. They are ignorant to what can be done in a smart home.
Related to this reason, is that some people say they have no need for smart devices, or that they don’t find them useful. If you went and read about the phases of technology adoption, I’d say these are people in the late adoption phase. They have a high degree of skepticism, and are typically skeptical about an innovation.
They’ll come around eventually, once they see how useful a smart home is and all the things that it can do.
6 Quick Smart Home Upgrades
I’ve covered the research. We now know that today’s home buyer are looking for a little more than a fresh coat of paint or neatly trimmed shrubs. As Millennials and Gen Z come more and more into the housing market, they are looking for a handful of helpful smart devices.
Here are 6 upgrades that you can complete in about 15-30 minutes per device. The cost of all 6 devices is estimated to be around $500 – $1000 total, depending on available rebates and the devices chosen.
Smart Thermostat
A smart thermostat is going to set you back $100 – $250 bucks, but be sure to check your local utility for rebates. You may even be able to get one thermostat for free. Features you might want to look for include easy and intuitive manual control (you know, the old fashioned way), voice control, geofencing, and the ability to automatically adjust the temperature depending on if you are home or away, or if it senses people through room sensors.
Installing a new thermostat is usually a simple process, assuming you have a fairly modern home with a common wire. It’s as simple as:
- taking off the old thermostat,
- drilling a couple new holes for mounting the new thermostat,
- connecting the wires from the wall to the mount,
- and plugging in the thermostat to the new mount.
The only tools needed are a drill and a screwdriver. IN most cases you can install the thermostat yourself, but be sure to hire a professional if you need extra help. Ruining a heater or air conditioner unit is expensive!
You can find out which thermostat I recommend by heading on over to my smart thermostat recommendation page.
Smart Video Doorbell
A smart video doorbell will set you back another $100 – $250 dollars. Unfortunately, there are not typically utility rebates for these. It all an out-of-pocket cost.
Video door bells add to the feeling of being more secure by providing a video right at your front door. That’s a prime location the many security cameras tend to miss, as a lot of entrances are recessed after a porch area. Video doorbells can also add to security by sending an alert when motion is detected, and, of course, when someone rings the doorbell. Depending what version you choose, many can store the video in the cloud.
Installing a smart doorbell can vary from being extremely easy to just regular easy. Some version are battery powered, so you just put a battery in and stick it next to the door wherever seems good. Other version are hardwired and require power from the preexisting doorbell. This requires pulling out a screwdriver, connecting two wires, and screwing on the new unit. A drill will probably be required as well to install a mount for the new video doorbell.
You can find out which smart video doorbell I recommend by heading over to my smart video doorbell recommendation page.
Smart Lock
A smart lock will set you back another $100 – $250 dollars. I know, it seems like every smart device so far is in this price range, but smart locks overall are closer to the $200 – $250 mark. Don’t worry, it gets cheaper from here.
A smart lock is a good combination to go with the previously mentioned smart video doorbell. The doorbell can show you who is at the door, and you can unlock the house using the smart lock. This can all be done while you are away from the house. Hopefully you’re away on vacation!
Smart locks overall provide a wealth of helpful smart features. Those features can include automatically locking the house when you leave, and unlocking when you get home, as well as providing multiple electronic keys that only work during specified time frames. Perspective home buyers will want a house with one of these for sure.
The smart lock is one of the trickiest items on this list, but it’s still easy enough that I included it. It can’t be that hard if it only requires a screw-driver, right? The only reason I say it is a little tricky is that you have to make sure everything is lined up correctly during the install. Other than that, it really is quiet easy.
Smart Bulbs
A smart light bulb will set you back somewhere around $10 – $100 dollars. The total cost really depends on the number of smart bulbs you decide to buy. You can get a Philips Hue starter kit for around $100, and includes four bulbs. Keep in mind that color-changing bulbs are more expensive than just white bulbs.
There are many ways to use a smart bulbs, just like many smart devices. You can have them turn on when you get home, turn off when you leave. Adjust the brightness depending on the time of day, or change color based on the weather.
Do I even need to explain how easy installing a light bulb is? Really, smart bulbs are as easy as installing any other light bulbs. You unscrew the old one, and screw in the new one. Done.
Smart Speaker
The price range on speakers varies a lot! Google and Amazon are basically giving some models away for free. Chances are, you could get one free if you buy one of the other products on this list. If you want a higher end version with a nice speaker, or perhaps one with a screen, prices can reach $250 or more.
Smart speakers are usually the one place where all your devices get connected together and are controlled from one place. For example, if you bought one with a screen, you could ask it to show you the video doorbell. Or turn on the lights, adjust the temperature, lock the door, etc. The list is just about endless. You can see that it integrates with each of the other devices on the list. Oh, they can play music too.
Choosing the right smart speaker does taking a bit of planning, because you will want all your other smart devices to be compatible with whatever speaker you choose. If you have an Amazon device, you will want to look for smart devices that say they are compatible with Amazon Alexa. The same goes for if you choose Google instead of Amazon. Compatibility can easily be found with a search online, or their is usually a logo on the box.
Installing a smart speaker may even be easier than installing a light bulb. I guess it depends how far you have to bend over to reach the outlet, but their is no installation required. You simply plug it into an outlet.
Smart Sprinkler Controller
To round out the list of easy to install smart devices that will increase your home value is one that will control your sprinklers. These range in price from $80 to $250, just like the first three devices I listed. It depends how many zones you need to control.
Rachio, one of the most well-known smart sprinkler controllers, claims that it saves 30% on water usage for most customers. A lot of the city water utilities price water on a tiered rate, meaning that saving 30% of water is likely saving you more than 30% on your bill. Show this to someone wanting to buy your house, and that becomes a real incentive.
Installing a smart sprinkler controller is a lot like installing a smart thermostat, only the last two steps are reversed. Taking off the old controller, drill a couple new holes for mounting the new smart controller, mount the new smart controller, and then connecting the wires from the wall to the smart sprinkler controller.
Show Off Your Smart Home to Potential Buyers
Make sure your realtor has access to your smart devices and is able to use them. Smart devices are pretty intuitive, so it shouldn’t be hard to explain how to use them. Also, realtors tend to be all about houses, so they likely already know some about smart home devices and how to use them.
One idea is to have the realtor unlock the home by holding up their phone to the smart lock, or pressing a button on his smart phone, instead of using a traditional lock box.