Are Smart Homes Worth More?

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The average new construction sold in the U.S. in January 2018 cost $382,700. That’s a healthy number, particularly when you consider that that figure encompasses homes built across the entire country, from real estate-starved New York City to rural Nebraska.

Many modern houses are built to be tech-savvy, utilizing smart home devices and high-performance materials. That can increase the perception of these homes’ worth, increasing their assessed value and putting pressure on older homes on the market to keep pace with their technology.


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Are smart homes truly worth more? It depends on what’s “smart” about the homes.

What’s Influencing Valuations

Just like any other home addition, smart devices’ value is dictated by a wide range of factors: cost, maintenance, security, convenience, and curb appeal. Anything that requires a larger payout or more effort than it offers in return naturally decreases its own value.

InMyArea, a home services comparison website, says that “smart homes sell better,” explaining, “Home automation is becoming a standard in today’s home.” The company says that specific DIY efforts can boost a home’s asking price, including automated lights, automated thermostats, and automated locks. InMyArea emphasizes that the artificial intelligence underpinning many smart home devices — allowing them to understand people’s habits and adapt — makes them valuable, as does their one-time price and homeowner-handled installation.

Andrew Thomas, the co-founder of SkyBell, a smart video doorbell that sends video of your front door to a smartphone, says the sophistication of smart devices offers a lot of benefits below the surface, too. He points out that many of these services get rid of ugly wired systems and empower homeowners to take advantage of existing resources: “You already pay for your phone and Wi-Fi internet service — why not cut the wires and remove the ugly security systems for new smart Wi-Fi connected devices that look modern and sleek, keep you safe, and keep you connected to the people you love most?”

He also notes that there are multiple benefits to smart home products that add value to your home. “Robberies don’t happen every day. But every day, you might receive a package at your front door or your kids come home from school. In these moments, smart home products can help you reduce package theft or give you peace of mind by knowing your kid is home safely and enjoyment by having a quick conversation. One parent reports that he and his son have a little chat every afternoon, no matter where Dad has to be for work. He’s fully prepared to prevent a worst-case scenario; in the meantime, he gets to also enjoy a regular dose of best-case scenario.”

Additionally, studies found that the Nest smart thermostat paid for itself within two years by reducing energy use. They also found that the lowest-income group experienced the biggest savings percentage of any group included in the studies, which could equate to a bigger boost to lower-priced houses. And PwC found that one of every four Americans with internet owns a smart home device, meaning those who aren’t in that cohort could be falling behind in property values.

What’s Making a Real Impact

A survey by iControl Networks (now owned by Comcast) found that more than 90 percent of people said home and family security would push them toward creating a connected home. And 44 percent of Millennials indicated to Coldwell Banker that they’d pay $3,000 or more to create a smart home.

A smart home can result in insurance premium savings, as well as discounts, beyond their initial value bumps. But remember that home values are determined by more than efficiency and novelty. Experts recommend using a property value calculator.

Across the board, however, these smart devices have been deemed true value boosters:

Smart doorbells and security systems

Smart DIY doorbells have earned high marks because they offer continuous security through video, motion sensors, and audio. Some models enable entry into a home through a keypad that operates on a number system or fingerprint ID, eliminating the need for extra sets of keys.

Likewise, smart security systems often have multiple touchpoints and protection built in so there’s not a point of failure across weak connections, power outages, or a natural disaster. With encrypted signals and confirmed alarms, many smart security systems — like smart doorbells — boost homes’ value because they come with enhanced protection of the home itself.

Smart thermostats

Smart thermostats are popular because they can be managed from virtually any portal, whether a laptop or an iPhone, allowing homeowners to control the temperature — and resulting cost — from anywhere. They’re also capable of learning habits, eliminating the need for an owner to manually turn up the temperature at bedtime or lower it while at work. Many realtors state that a Nest or smart thermostat can increase the perception of a home being more modern or newer than it actually is.

Smart lighting

Smart lighting systems come with dimmers and sensors that work very similarly to their smart thermostat sisters — smart lights can be turned off from a smartphone or set to gradually turn on when it’s time to wake up in the morning. Smart outdoor lighting can also serve as an additional security feature, utilizing a motion detector to spot intruders or simply turning on for nightly dog bathroom breaks before bed.

Smart devices don’t make homeowners feel very smart if they don’t result in a better home value — or a more convenient and efficient environment. Smart homes have proven to have a real payoff, but it’s smart to remember: Anything requiring a larger payout or more effort than it offers in return decreases its own value. Upgrade your home, but keep an eye on what’s truly valuable.

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