Thomas Roszak can instantly see the face of that person ringing his doorbell without ever having to step near his front door or windows. He can pump hard-rock music into his bedroom while at the same time playing jazz in his living room and classical music in his bathroom, all by pressing some buttons on the same remote control.
He can order his furnace to fire up at extra power as he drives home from work, so that his house will be toasty warm when he steps through his front door. And when he yearns for a midnight snack, he can flip the lights on in his kitchen before he even walks out of his bedroom.
Does Roszak live in a house of the future? Not really. Builders completed his house in Northfield before Thanksgiving. And the technology that allows Roszak to accomplish seemingly futuristic feats is widely available, though extremely expensive. Roszak is just one of a growing number of homeowners who have dedicated themselves to creating the smart, or connected home, a residence where computers, televisions, lighting systems, heating systems and home security, among other things, are all linked to a centrally controlled network.
Smart homes allow their owners, armed with either a remote control or centrally located touch pad, to perform such nifty tricks as flipping on the lights in rooms before they enter them or to adjust climate controls so that certain rooms are kept warmer when people are using them and colder when they’re empty. Through the use of multiple external video cameras, they can check from their bedrooms to see if the person knocking at the front door is the pizza man or someone passing out campaign fliers. Smart-home technology even allows homeowners to dial onto the Internet to check their homes’ rooms while they are on vacation.
But one thing smart-home technology doesn’t do yet is increase the resale value of a home, though real estate professionals say this fact will soon change. The question then for homeowners is this: How much should they invest in smart-home technology if they’d like to get at least a majority of their investment back should they have to sell their home?
The high cost of smart-home technology today makes it difficult for homeowners to recoup their investment come resale time. For instance, Roszak, owner of Evanston-based Roszak/ADC, an architecture, development and construction business, said his smart-home systems cost $100,000. Prices like these, he said, are the only thing preventing connected-home technology from becoming a truly in-demand housing amenity.
“The thing is, three or five years ago, my system would have cost $200,000. As the prices start going down, more people are going to want this. It will become just like wiring for high-speed Internet access. That’s becoming standard now,” Roszak said. “If the system I have cost $8,000, everyone would want it in their new homes. At $100,000, though, it’s still too prohibitive for most people.”
Roszak, if he had to sell his home tomorrow, could not reasonably expect to tack $100,000 onto its sales price because of its technological features. For this reason, local real estate experts say that homeowners should only spend big dollars for connected-home technology to improve the quality of their lives, not with the hope of pumping up their home’s resale value.
“Does it really sell houses? I don’t know,” said Jean Anderson, a Realtor with Koenig & Strey GMAC Real Estate’s Lake Forest office. “A house I am representing now has $150,000 in electronic equipment on the lower level. But not everyone wants this technology. You have to find that yuppie couple that wants all those bells and whistles and is willing to pay for it.”
Even those homeowners committed to the technology recognize that it is still largely a niche product, one that appeals mainly to buyers of upper-end homes.
“The stuff is out of this world,” said Brant Booker, a real estate agent with Koenig & Strey GMAC Real Estate’s Lincoln Park office who is currently retrofitting smart-home technology into his own residence. “But it really is still so expensive. If there was a way to do it in a smaller, less expensive package, I think it would take off.”
This is not to say, though, that an investment in connected-home technology won’t pay off in any way. Sometimes, technology makes the difference between a home that sells and one that doesn’t, says Pam Weinert, a real estate agent with Re/Max of Barrington.
“You can’t put a price on the value that this kind of technology adds to a home,” she said. “But it may make it more saleable. If two houses are identical but one has it and the other doesn’t, the one with it will sell first.”
A recent study suggests that local Realtors are correct in their assessment of the resale value of this technology. The Internet Home Alliance, a network of companies dedicated to advancing the home-technology market, recently studied the demand for connected-home technology. Their report found that so far about 42 percent of U.S. households are inclined to adopt a connected home to enhance their quality of life. Of this group, surveyors found, only 17 percent are extremely enthusiastic over smart-home technology.
The study also found that 48 percent of U.S. households are hostile to the idea of a connected home. Some members of this group, according to the study, are concerned about a possible loss of privacy due to connected-home technology. An additional 10 percent of households are largely neutral about the prospect of connected homes, the study found.
Jim Devlin, a board member of the Internet Home Alliance and president of Invensys Home Controls, a production and energy management company, said the survey results didn’t surprise him. Connected-home technology will not become more popular–and won’t result in increased home resale values–until manufacturers develop products that in the long run will save homeowners money. Heating systems that save consumers money on their monthly heating bills are an example of this, Devlin said. So are remote diagnostic tools that alert homeowners when major appliances such as refrigerators need servicing, thereby extending the products’ life spans, he said.
“I think there will be real estate long-term values once the technology is better deployed,” Devlin said. “How can we get enough of an increase in efficiency so that the technology pays for itself? When we reach that level, the consumer is presented with an easy choice.”
Currently, smart-home technology appeals to too broad a range of homeowners to have a significant resale value. The Internet Home Alliance Survey found that the most likely adopters of the connected home are married homeowners from the ages of 35 to 44 who have one or more teen children. Households interested in connected-home technology are typically headed by two college-educated working professionals with an annual household income of $75,000 or more.
Paul Carter, vice president of contractor services with Sears, Roebuck and Co. in Hoffman Estates, and another board member with the Internet Home Alliance, sees this changing in the near future.
“Do you have school-age kids? Are they using computers in school? That’s all you have to ask people to see if they are interested in having smart-home technology such as high-speed connections to the Internet in their homes. These people see that in the future their kids will probably be required to turn in their homework through the Internet,” Carter said. “People today want to surf the Web from their televisions. They want to watch movies on their computers. They want to control their thermostats from their offices. If the wiring is not in one house they are interested in buying, but it is in a similar house in a similar price range, they’ll go for that wired house.”
Avi Alim, sales and marketing manager at Lake Forest’s Alim Builders, is certainly a believer in connected-home technology’s ability to help sell a residence. His company is building a 6,000-square-foot home in Lake Forest that features heating and cooling systems that adjust automatically according to the weather conditions and a lighting control system that allows the home’s occupants to, through remote control, adjust rooms’ light settings to a number of scenes, including light and midnight snack. The home’s owners while away can dial into the Internet to see if a relative is knocking on their front door. With a few clicks, they can remotely open the door to let that relative in. The home also features four external remote cameras for security purposes.
In all, Alim Builders has invested more than $200,000 in technology in the residence. The home will go on the market for $3.35 million, and Alim plans to extensively feature its technology in his marketing materials.
“We’re kind of going out on a limb on this. We’re building this home on spec,” Alim said. “But I think this technology is really going to draw people.”
Alim, in fact, thinks that smart-home technology will become more popular faster than people expect.
“It’s all a question of time,” he said. “When people realize that the benefits of this technology outweigh the costs, then they’ll ask for it.”
