Fiber and property values
Michael Goldstein • August 20, 2015if( has_post_thumbnail( $post_id ) ): ?>
As you would expect, the most profound return is on an improvement from no or lousy Internet access to reasonable access. But there still seems to be a strong correlation between property values and Internet speeds going from reasonable to fast to crazy fast (as in Gigabit, as in the kind of Internet that only fiber can deliver and only Ting can serve up with love).
Interestingly, one of the challenges in proving causality, that the Internet speed is actually driving the value, is that the communities that are demanding and building Gigabit Internet also tend to be communities that are doing other appealing and enlightened things (culture, education, environment, crime prevention) that attract buyers and increase property values.
But it is still early days for broadband infrastructure and there are still plenty of great examples of “matched markets,” in this case, markets that are comparable in every way but Internet speed, to help draw a pretty clear conclusion. Buyers are considering the availability of fast Internet when comparing towns and neighborhoods. That translates to increased property values.
Now, at the town or neighborhood level, there might not actually be a ton you can do to leverage this information unless you are the visionary president of a city council, the iconic founders of a local ISP or even a lion-hearted lobbyist in a woefully underserved region.
There also might not be anything you need to do.
Westminster, you can thank Dr. Wack. Charlottesville, you can thank us! It appears your homes just increased in value by at least a couple of percentage points. Congratulations.
If you already have fiber available to you in your neighborhood, I think it’s more fun and relevant to think about the home renovation sort of calculation on your own installation.
People always examine returns on home improvements with studies like this “Cost versus Value 2015” analysis. Should you renovate the kitchen or the bathroom? Should you finish the basement? (It turns out you should really just replace the siding. Long live superficiality!)
To me it’s actually all a bit irrational. If I’m buying a house from you, wouldn’t I rather you drop the price by $10,000 than invest $10,000 in a new deck? Presumably I can spend that same $10,000 myself and get a deck that suits me better. (I would start by painting over that cheesy white finish you went with. Dude, this ain’t South Beach.) But buyers seem to consistently cover a good chunk of renovations (even years afterwards) for a “move in” situation.
We are charging $399 to install fiber to the home, enabling the fastest possible Internet service in the world. There will likely not be another technology that can deliver faster Internet for at least a century. So, it’s an improvement that never fades. Plus our fiber comes in a pretty neutral color!
Again, it’s not quite rational. The buyers can just as easily pay the install price and have Ting service a day after they move in. They can replace the siding too. Mostly, you should do the install because crazy fast Internet will improve your life. But if you’re selling a home that’s worth, say, $400,000, it’s hard to imagine that advertising, “Pre-installed optic fiber for symmetrical Gigabit Internet service” (or something really fancy like that) wouldn’t add .1% to the price, isn’t it?