Smart Homes and Real Estate Market Trends

Topics: specialty risk

Summary: Smart home technology not only makes homes safer and more efficient, but these devices are now becoming a standard feature prospective home buyers look for. Find out what some of the most popular smart home devices are, how to protect them, and how they could affect the real estate market going forward.

What is a Smart Home?

The smart home industry is booming. From video doorbells to thermostats, smart technology makes homes safer and run more efficiently than ever before.

While homeowners use smart home devices for a variety of reasons, the most popular products are designed to enhance home safety and energy use. Today, smart home hub systems can be accessed through a centralized interface on a smartphone or tablet, or from a voice-activated speaker like Amazon Alexa or Google Home. These systems allow the user to control everything from the lighting inside the home to the sprinkler system outside. Global spending on smart home devices is expected to grow to $157 billion by 2023.

Potential home buyers are taking note of houses that have smart home technology features, too. In fact, when considering both their current and future residences, 46% of consumers report that smart home devices have become an essential part of their lives.

Common Smart Home Devices

smart home technology and real estate trends
The best smart home technology simply makes life easier and safer for the resident. Not only that, but smart home devices can also provide for better energy efficiency, which can potentially save the owner a substantial amount of money on utility bills.

Some of the most popular smart home devices include:
  • Smart doorbells: Smart doorbells like Amazon’s Ring allow residents to see who is at their door simply by clicking the app on their smartphone. They can also provide a level of protection from “porch pirates,” thieves who steal packages, and they are a defense against home invasion and property theft.
  • Smart thermostats: Smart thermostats, such as the Nest, make heating and cooling the home as easy as opening the app on a smartphone. These devices connect the heating and cooling system to the internet, and the user can control the settings right from their phone, from any location.
  • Smart lightbulbs: Smart lightbulbs offer residents the convenience of turning on light fixtures throughout the home with a voice command. Smart lights can also be used on the home's exterior to create a system of motion-activated security lights such as floodlights and pathway lights.
  • Smart door locks: Similar to a smart doorbell, smart locks allow residents to monitor who is entering and leaving the home while they’re away. Users have the ability to lock or unlock the doors from a remote location, and they provide convenient keyless entry.
  • Smart security systems: These home security systems can range from affordable, do-it-yourself options with self-monitoring to professionally installed and monitored ones. Some systems allow users to add extra features, such as monitoring doors and windows, which can provide whole-house coverage.

Smart Home Technology Damage and Security Concerns

On top of security concerns, no electronic device is completely safe from technology issues or accidental damage. It’s important to consider purchasing an extended warranty, also known as an extended service contract, designed specifically for consumer goods like electronics to keep them protected and working properly. Smart home products can be pricey, so these types of service contracts plans, which can be added on for a small cost, provide consumers with additional coverage and give peace of mind that their devices are covered if they are damaged or defective after the manufacturer’s original warranty period has expired.

“Traditional home warranties don’t typically include the increasing number of electronic devices in the home. When you purchase or sell a pre-existing home, ensure the home warranty covers all smart appliances and equipment,” recommends Aleem Lakhani, EVP Specialty Risk North America.

Smart Home Technology and the Housing Market

With mortgage rates hitting record lows in 2020, the housing market has been on fire for quite some time. Rates are predicted to remain low as the economy continues to recover from the COVID-19 pandemic, although a slight increase is expected. Demand for homes is high while supply continues to be low, which means a competitive housing market will continue to be the trend throughout 2021 and into 2022.

Savvy agents can add value to a house sale by sharing which appliances have service contracts that are transferable to the new homeowner. This transferable feature is determined by the seller of the warranty. Agents or homeowners can contact these companies for the terms and conditions and leverage the extended service contract as a benefit to the home’s value. For instance, if the refrigerator breaks a year post-purchase, the buyer is covered for the repair or replacement costs.

There’s no doubt that potential home buyers are looking for smart home technology as they consider future housing options. Ninety-one percent of realtors feel that smart home tech can help sell a house, and a recent survey shows that around 81% of home buyers would be more inclined to buy a house if it already had smart home technology products. Likewise, new home builders are already integrating smart home devices into their projects, especially knowing how appealing they can be for buyers by saving them money in the long run.

Warranty Solutions from AmTrust Specialty Risk

As one of the nation's largest warranty writers, AmTrust Specialty Risk has been customizing innovative insurance solutions for over 20 years. We work with consumer products manufacturers and administrators around the world to create coverages that help consumers overcome common purchase barriers, from the fear of expensive repairs to concerns about accidental damage. For more information about partnering with Specialty Risk, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.
Copy

Time Zones

13

Countries

34

Brands

12

Agents

9500