Gigabit Internet Connections Make Property Values Rise

Jason Koebler writes: When families go to buy a new home, they're most often looking for a couple things: Good schools, a safe neighborhood, maybe something that's near public transportation. And, increasingly and undeniably, access to gigabit internet service. A study by RVA LLC Market Research and Consulting found that fiber optic internet adds roughly $5,250 to the value of a $300,000 home. "It's getting to the point where, if my neighboring community has a gig and we're still doing satellite, the property value in that town is going to go up," Deb Socia, director of Next Century Cities, a coalition of cities trying to provide gigabit internet speeds to their citizens, said. "You're going to lose people and you're going to lose revenue without it. I'm hearing it from folks in different chambers of commerce, in real estate, in politics."

Comments

Umm, how about a more meaningful comparsion?

[Shakrai]

"It's getting to the point where, if my neighboring community has a gig and we're still doing satellite, the property value in that town is going to go up," Deb Socia, director of Next Century Cities, a coalition of cities trying to provide gigabit internet speeds to their citizens, said. "You're going to lose people and you're going to lose revenue without it.

So she's equating high latency capped satellite service against gigabit fiber? Well duh. It would be more interesting to see if average people would really be willing to pay that $2,500 premium if the choice was between DOCSIS 3 service and fiber service. Or even between reasonably fast DSL vs. fiber. It's been my experience that there's not much difference for the typical user (hint: /.'ers are not typical) once speeds exceed 5mbit/s. What's the practical difference between the higher D3 tiers (say 50mbits) and gigabit fiber? How many websites can actually push a gig? Symmetrical upload would be the only selling point I can think of, but strictly speaking you don't need fiber to provide that service, nor do you need gigabit speeds to take advantage of it. I sit on a 30/30 connection right now that meets all of my needs and as an IT professional I'm well ahead of the target market for consumer ISPs.

Re:Umm, how about a more meaningful comparsion?

[TWX]

It's increasingly going to be about multiple users or automated users though. You're going to have two or three televisions streaming high definition content, you're going to have people using Internet-connected applications or games while those televisions are on in the background. You might even have security systems with offsite data storage at the security company; further streaming video content, this time sending rather than receiving.

Re:Umm, how about a more meaningful comparsion?

[Shakrai]

It's increasingly going to be about multiple users or automated users though

I've heard the multiple users argument before; I'm not unsympathetic to it, though I do have to wonder about the fairness of a price structure that charges the household with five simultaneous HD video streams the same as the household with zero or one HD video streams. Note that I'm not arguing in favor of caps; they're a blunt and ineffective solution (moved bytes don't cost the ISP money, but sustained bit-rate does) but I've often wondered why demand or 95th percentile billing wouldn't be fair.

There's a lot of griping about the state of broadband in our country, griping that I think would be minimized if people adopted some perspective. I remember paying $20/mo (in actuality $40/mo, if you consider the second POTS line....) for 14.4k dial up. In my area we now pay $45/mo for the entry level (15mbit/s) D3 package, working up to $80/mo for the highest (50mbit/s) package. None of those prices seem particularly outlandish to me and the comparison looks even better if you consider inflation; the $20 that I was paying for dial up in 1995 is now worth about $31, so paying $45/mo for more than one thousand times the bandwidth seems like a steal to me.

It's even cooler when one thinks about LTE; I remember when mobile data was a 9600 baud serial connection to my Motorola iDEN phone. Now I have a bloody DS3 in my pocket that will work almost anywhere in CONUS, for less than the cost of a nice meal out, and people still find things to complain about. Y'all don't know just how good you really have it.....

Re:Umm, how about a more meaningful comparsion?

[xaotikdesigns]

I don't know, think about how many toolbars that gigbit internet could handle? The average user could have 10, no 20 different toolbars installed, and still not notice any degeneration of service.

If you proposed a $5000 hookup-tax for internet

[Overzeetop]

You'd probably have most of the villagers at the town hall with pitchforks and torches. Funny how we want the services and value, but almost nobody is willing to pay what it's worth to get it.

Re:If you proposed a $5000 hookup-tax for internet

[Tablizer]

The trick is to get the Federal gov't to subsidize it, then vote "the tax-and-spend bums" out as a reward. Works every time.

Re:If you proposed a $5000 hookup-tax for internet

[Anonymous Coward]

And they'd be right to do it, because 5000 dollars is way excessive to apply at once, much smarter to amortize the costs (which will usually be less than 5,000 dollars), over the life of the system.

Y'know, the sane way to do things.

Re:If you proposed a $5000 hookup-tax for internet

[Austerity Empowers]

I would pay $5k tomorrow for fiber provided that the fiber installed could be serviced by any number of providers that i can select at will, without contract or obligation.

If comcast or att want it, I will not line up at town hall with torches and pitchforks, I will ram them up the offending CEOs more intelligent end while slapping the other end across the face with my terms of service.

Meh

[Anonymous Coward]

I'd still rather have a strip club nearby. Also ready access to marijuana.

Re:Meh

[KingOfBLASH]

I'd still rather have a strip club nearby. Also ready access to marijuana.

Fortunately for you, the supply and demand curves will provide you with much cheaper housing.

Not surprised

[Kjella]

All those that talk about "location location location" really mean "the things you can't change". Interior, exterior, garden, floor plan, pretty much anything can be redone but you're stuck with your surroundings. And you're usually stuck with a crappy Internet connection. And despite most people not getting around to changing all they'd like to change, they kind of know they could. Things you can't fix tend to gnaw at you a lot more. I'm probably more Internet-addicted than the average person but I don't think I'd want to live at any place with <10 Mbit/s Internet. Unless it's a tropical island or something, then I'd make concessions. Or put up a big satellite dish, not really sure.

Why Aren't Homebuilders in on This?

[dsginter]

I've often wondered why homebuilders aren't building fiber to the home and then coordinating with raw internet providers like Cogent. Add some mesh networking to support older adjacent homes and you'll finally kill Comcast.

Re:Statistical Anomaly?

[KingOfBLASH]

That's not how statistics works. If their sample size is large enough then, yes, it may be possible to determine that a good internet connection gives your house an increase in value of 2%.

And why shouldn't it? Small improvements like putting in a nice jacuzzi tub to make the bathroom nicer can also be shown to have single-digit-of-a-percent increase in value.

Additionally, I think it's more believable because it's such a small percent. If people were willing to spend 25% more, that'd be pretty crazy, right? 2% is something someone might not care about over a 30 year mortgage.

Re:Kansas City - not the best market to look at

[TechyImmigrant]

>Some backwater with a 2.7% rise in values is definitely not worth the time to even research.

If that backwater had gigabit fiber and a $50K houses, I could buy 4 for cash and live there off the rental income from the other 3.

I couldn't live there without the interwebs though.

YouDontSay.JPG

[jtownatpunk.net]

I just bought my forever house and had a few beautiful places picked out but had to change my search area because internet access sucked balls everywhere in that area. At best, I could get "up to" 3mbps DSL at a couple locations. Now I know why prices were so much lower in that area. And the realtors I talked to said "What kind of internet is available?" is one of the first questions people ask these days. Of course, when I asked that question, none of them could answer it.

So I shifted my search closer to The Big City where I got cable internet and almost as much privacy.

As for the value of internet, I was ready to spend up to 10 grand to improve infrastructure to the right property so figure that into the equation however you will.

Re:YouDontSay.JPG

[gnu-sucks]

Don't you think though, with a "forever" house, waiting a few years for bigger, faster internet would be worth it?

I think it's inevitable.

Re:Kansas City - not the best market to look at

[Shados]

When I was looking for a place in Cambridge/Boston, the (few) places with FiOS access (as opposed to being stuck with Comcast) were sure to put it on the fliers or MLS descriptions. So I assume people cared.

Of course, FiOS around here is arguably worse than Comcast, which is saying something, but at least you have options if you live in one of those spots.