The term “Internet of Things”, or IoT for short, has been bandied about often in the media. The question is, do most people know what the term refers to? More apropos to this forum, do realtors and others who work in the real estate industry know what the term means and how the Internet of Things will impact their industry?
Generally, the Internet of Things refers to the connecting of everyday devices – think lamps, air conditioners, furnaces, engines – to the Internet so that these objects can receive and send data and communicate with each other. The concept has the potential of affecting a wide span of industries.
Consider intelligent IoT manufacturing systems that could immediately ramp up production through a dynamic IoT-based response system. Or think about IoT devices monitoring infrastructure, like roads and bridges, and monitoring condition and repair needs in real time. Or, as another example, consider intelligent shopping devices that could monitor spending habits.
Powerful stuff. And the fact of the matter is that this technology is rapidly advancing, with certain stages of it already being brought to market today, as was captured by a recent Financial Post article.
The article describes how Formula One teams, notably the Sahara Force India team, are now using a host of sensors on their Formula One racecar to collect data on a scale and with real-time accuracy that was impossible ten or even five years ago. Internet of Things technology has enabled the Sahara Force team to reduce development engineering expense and time.
There is little doubt that IoT technology will have an increasing impact. As the same Financial Post article mentions, “… regardless of how each firm reacts to the rise of the Internet of Things, the fact remains: every company will be affected.”
Every company will be affected. Every industry will be affected too – including the real estate industry.
Many of us who work in real estate have a concept of what the Internet of Things may look like when it comes to future homes and residential living. Smart technology like alarm clocks communicating with coffee makers and smart thermostats tracking preferred indoor temperatures and adjusting energy use accordingly, and refrigerators knowing when milk or butter is running low.
IoT technologies like these will be a part of future homes. In order to be competitive and ahead of the curve, it’s important for today’s realtors to, one, be aware of this, and second, understand how this technology will affect the home buying experience and the process of showing homes to prospective buyers.
Consider, for example, the generational difference that is inevitable when any type of new technology – especially as disruptive as IoT – is brought to market. When the Internet of Things becomes more common, realtors will have to gauge a buyer’s acceptance of this new technology. One way to gauge this may be through the buyer’s age. Although not a fast and true guideline, it’s likely that young homebuyers will be more accepting of the Internet of Things in the home than older buyers.
Following a similar line of thought, Internet of Things technology for the home will undoubtedly be an added expense for the homebuyer. The price of a traditional air conditioner will be less expensive than a smart, Internet-connected air conditioner. When marketing a home, realtors will have to note the added expense and may want to focus on the long-term savings that Internet of Things technology will provide. An advanced air conditioner may be more expensive at the time of sale. However, the long-term energy savings it will provide will make up for the added expense.
Finally, as an increasing amount of home-related IoT technology comes to market and as it becomes more of a reality as far as cost, it will be up for realtors to maintain current knowledge of the latest IoT advancements, especially when judging and marketing new development. Does a new development offer the latest in IoT technology? How much does it impact price? Will this technology actually be of use to homeowners? These are all questions that realtors will have to ask themselves when marketing a home.
As mentioned, Internet of Things technology will become an increasing part of modern homes – in order to remain competitive in the industry, it will be up to realtors to understand and engage with the new technology.