Location, location, location: Broadband access now a factor in residential real estate

Associated Press writer Peter Svensson reports on what I've predicted will be a growing factor affecting the residential real estate market: whether a home has broadband access. Broadband has become a basic telecommunications utility. Homes that lack it are becoming about as desirable as those without electricity or water hookups. Svensson quotes Edward Redpath, a real estate broker in Hanover, N.H., as saying he's seen deals fall through once the buyer realizes a home can't get broadband.

I disagree with Svensson's theory that over time the lack of universal broadband in the United States along with higher gasoline prices could pull people from the countryside toward cities and suburbs.

Small local Wireless Internet Service Providers (WISPs) are springing up throughout the U.S. to provide wireless broadband where the telco/cable duopoly does not. Residents and businesses will also take matters into their own hands and form and invest in cooperatives to build their own local fiber optic telecommunications infrastructures just as they did several decades ago to bring electricity and telephone service to their communities.

As Svensson's story suggests, they will be motivated by economic considerations to boost the market appeal and value of their homes -- particularly as they work to crawl out of the current real estate market downturn -- and to support their ability to start businesses and telecommute to their jobs.

Lack of broadband hurts Tahoe property values

It's only a matter of time before properties in broadband black holes began to fetch less than comparable properties that have high speed Internet access. That downside is likely to be exacerbated in the current soft real estate market:

The lack of high speed internet access frustrated both business owners and residents in the area, and also began to take a toll on real estate values. Local real estate agent and petition organizer Brett Williams of Agate Bay Realty had this to say: “It’s starting to affect the values of the properties of the areas that are not serviced by high-speed,” said Williams. “If you are trying to fill a rental property, two that are similar, one with high-speed and one without, its difficult to lease the second property. You have high-tech people who are looking to lease a property for four to five months for a ski lease, and can’t telecommute.”