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Survey: Slow Broadband Can Knock 20% Off Home Value
by Karl Bode 10:57AM Tuesday Mar 04 2014
Most of you are smart enough to check out your potential new home's broadband options before moving. As such it's not too surprising to see UK Property search website Rightmove claim that data they've collected indicates that slow or nonexistent broadband options can obviously kill a sale, but slow broadband can erode the value of a home by as much as 20%. The website, which has started including broadband speed trackers next to home listings, note that a survey of 3,000 people found the majority of them were more interested in fast broadband than they were local school and transportation options.

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Chris 313
Come get some
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join:2004-07-18
Houma, LA
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No, Duh!

I may move in a few years and if the area I'm moving to doesn't have decent cable or or other HSI options, I won't be moving. No matter how nice the house or area is.

I'm too connected to take such a risk with everything that a move involves and then be stuck with it.
brianiscool

join:2000-08-16
Miami, FL
kudos:1

Florida

Not in Florida most of the people don't know what Broadband is.
openbox9
Premium
join:2004-01-26
Germany
kudos:2

Re: Florida

Wait until they die off. With a generational change in 10-20 years, things like ignorance of technology will begin to disappear.

battleop

join:2005-09-28
00000

Re: Florida

Along with the unavailability of faster speeds.

Anomon

@199.212.27.x
Not really in 20-30 years you will be where they are now.

Insight

@btcentralplus.com

Re: Florida

Well said !!
Many are living in the now, unaware of their futures and how they WILL change as adults over time.

michieru
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join:2009-07-25
Miami, FL
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Mashiki
Balking The Enemy's Plans

join:2002-02-04
Woodstock, ON
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You mean in most of Florida, you can't get broadband even when it's in demand. We had to fight tooth and nail to get broadband at my place in zephyrhills(took just a bit more than 5 years). And in the end only one company wanted to come in, and that was brighthouse. Never mind that there was a remote at the end of the complex, but neither verizon or century link wanted to do anything.

tshirt
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join:2004-07-11
Snohomish, WA
kudos:5
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No survey: How many would pay 10% more?

on a $400k home how many would pay $40k (plus debt service) over a 40 year mortgage to ADD fiber service?
how many would pay 20% ($80k)? for what will be 30Meg FTTC/advanced DSL service that britian now says will reach 95% by 2017 (unless they delay it again) ? plus the cost of actual service.

Makes $600 a year for 25/5 cable delivered, maintained and financed privately without obligation, to your door INCLUDING the first 300GB per month seem pretty cheap.

morbo
Complete Your Transaction

join:2002-01-22
00000
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Re: No survey: How many would pay 10% more?

Your comment is misleading in a few ways. The most important is that broadband availability is gaining in importantance. Like parents wth children look for quality school districts, the younger generation values fast and reliable internet.

Google Fiber is the case study that shows it doesn't take $40k-80k to add fiber. Even other options like muni fiber provide value to the community and save customers money over the Comcast equivalent.

People are done waiting for slow, overpriced internet.

tshirt
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Snohomish, WA
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Re: No survey: How many would pay 10% more?

I agree it adds value, it's the 20% I question.
If it adds 10% then it MUST be worth some additional payment, something that people here don't seem to believe in.

And we know nothing about google fibers cost, but so few muni's have ever reached breakeven, it's impossible to say they have saved anybody (yes service may have had lower monthly fees, because of the funding /risk taken directly by homeowners/taxpayers...still a cost even if not paid monthly on the broadband bill.)
existenz

join:2014-02-12
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Re: No survey: How many would pay 10% more?

I'm in KC and don't think GFiber particularly raised home values except in one area that had dilapidated bungalow homes that got a boost because of GFiber enticing startups. If a neighborhood getting GFiber is next to one that isn't getting it, then there might be a difference but will be hard to say until rollout is more broad.

There is a high income KC suburb, Overland Park, that will not get GFiber but all surrounding suburbs will. Will be interesting to see how that impacts OP.
bpratt

join:2006-10-24
Redwood City, CA

1 recommendation

I went thru exactly this math. I live in the heart of Silicon Valley, yet my home was in a dead spot with no high speed Internet option aside from satellite (no DSL, no cable, no line of sight for microwave, no 4G signal). I'm 100% sure that the 15K I spent to get conduit run and cable installed will be a drop in the bucket compared to how much it would cost me if/when I sell and there was no Internet available.
Skippy25

join:2000-09-13
Hazelwood, MO

1 recommendation

Again you mislead, as that is what you do best.

First off, you have no idea how many successful muni's there are compared to failed. From what I read, there are far more success stories than failures.

Second, you have no idea how many of the muni's were done completely without putting taxpayers at risk as they could have very well be bonded without government gaurantee. Which, to the best of my knowledge, is the most common bond sold in the US.

Third, you have no idea how much more someone is willing to pay for a home that already has FTTH or is being built and they have the option of choosing this.

Lastly, when I move I will not buy a home that does not have at least 500mpbs service. Therefore, any home that does not have that is worth $0 to me thus broadband adds 100% value to the home.

mixdup

join:2003-06-28
Birmingham, AL

True

I'm preparing to sell my house, and one of the first questions the realtor had was what broadband services were available.
ptbarnett

join:2002-09-30
Lewisville, TX

FIOS was a requirement for me....

When we were shopping for a new house last year, I knew that FIOS served the area where we were looking. We had it at our previous house, and I didn't want to give it up.

We found a house that was exactly what we wanted, and we were discussing the offer. But something was nagging me: I had met the previous owner, and he told me he had TW cable, and FIOS had never been installed.

So, I went to Verizon's website and put in the address. It came up: "Sorry, FIOS is not available at your location". I said to my wife -- sorry, we can't buy this house. The look she gave me could have set ice on fire.

I thought: "something must be wrong. Look again." I had mistyped the address: 103 instead of 105. Once I corrected it, FIOS was available.

We bought the house. The fiber was run from the street to our garage before we even took possession, and the install was complete before we moved in. It was a good thing, as we had a horrific ice storm the next day and were house-bound for 3 days.

IowaCowboy
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Same for renters

If I had to move, I would say the deal is off if the facility had an exclusivity agreement with a certain provider. I would also want my own cable modem connection instead of using a shared Wi-Fi connection provided by the facility. I trust shared Wi-Fi as much as I trust the NSA (even though they are snooping on us anyways). I would also want a facility that allows the same choice of services that a single family house has (CDV, HSI, and cable) instead of bulk purchasing agreements that limit the options.

Of course finding a place that would take an 80 lb Alaskan Malamute and a cat would be hard.

I could of course just use a Verizon Wireless LTE home router.
--
I've experienced ImOn (when they were McLeod USA), Mediacom, Comcast, and Time Warner and I currently have DirecTV. They are much better than broadcast TV.

I have not and will not cut the cord.
Chubbysumo

join:2009-12-01
Superior, WI
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Re: Same for renters

My mother in law moved to an apartment that had an exclusive deal with mediacom. You had to pay mediacom no matter what, and most of the residents there went with Dish or DirecTV, seriously, and the internet was spotty as shit, not working half the time, and mediacom could care less to send anyone out, since their "base price" was worked into your rent. These kinds of exclusive things are now illegal in most states, but that does not stop a monopoly
Mele20
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join:2001-06-05
Hilo, HI
kudos:5

Re: Same for renters

Why do you say these exclusive things are illegal in most states? Why would it be illegal for a multi-dwelling building to enter into such an agreement? Such agreements are very prevalent in Hawaii. I didn't have a TV for ten years recently but I still had to pay my full rent which includes Oceanic TWC analog Standard TV package (and would also include Standard internet tier except there are not enough broadband users here to be able to get a bulk agreement for that as well as TV).
--
When governments fear people, there is liberty. When the people fear the government, there is tyranny. Thomas Jefferson

cork1958
Cork
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join:2000-02-26
"If I had to move, I would say the deal is off if the facility had an exclusivity agreement with a certain provider. I would also want my own cable modem connection instead of using a shared Wi-Fi connection provided by the facility."

That would be EXACTLY part of what I would inquire about also!!
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Mele20
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join:2001-06-05
Hilo, HI
kudos:5

Re: Same for renters

Would you feel the same if there was only ONE broadband provider? There is only one here. Bulk gets you better prices for TV and would for broadband also if this building had enough that were subscribing to OTWC internet.
--
When governments fear people, there is liberty. When the people fear the government, there is tyranny. Thomas Jefferson

IowaCowboy
Iowa native
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join:2010-10-16
Springfield, MA
kudos:1

Re: Same for renters

Maybe there weren't enough people subscribing to internet because there were too many people sharing their linksys routers with their neighbors.

Not me; I live in a duplex and my internet is locked down with WPA 2 and it's SSID hidden.
Mele20
Premium
join:2001-06-05
Hilo, HI
kudos:5

Re: Same for renters

There's no shared Wi-Fi connection here. The discount would be because it cuts down on service calls when multiresident buildings have a bulk contract. Each internet subscriber has their own modem (rented or purchased) and the bulk contract would be for the standard tier at 15/1. Then if some wanted higher speeds they would each pay for the cost of the speed they wanted beyond the standard speed. I have wired only so no possibility of sharing.
--
When governments fear people, there is liberty. When the people fear the government, there is tyranny. Thomas Jefferson
Dodge
Premium
join:2002-11-27

Multiple options

When looking for a house last year, I made sure not to wind up in a monopoly situation as I've had before. For me it wasn't just enough to have HSI available, i needed to have options. We now have FIOS and Optimum available, but using FIOS at the moment.
biochemistry
Premium
join:2003-05-09
92361

Buying

I will likely be buying a new house soon and you can bet your rear it will have high speed internet available. Not DSL, but either cable or FTTH. If there is FTTH anywhere in the region then only FTTH and not just cable.
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elray

join:2000-12-16
Santa Monica, CA
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1 edit

2 recommendations

Utter nonsense!

Please, someone, anyone, show me comparable homes in comparable neighborhoods, where the sole distinction is poor broadband, such that I can buy them for 20% less.
Even at the very low US median of $188K, that's over $35K in savings.

The website's sampling methodology is complete garbage - it is counting browser search selections, not correlating closed sales prices to actual broadband speeds.

Few on this forum are willing to shell out even $5K to get wired with broadband. And yet, they're willing to finance an extra $35K+ for a house that has such access, while overlooking schools and transportation?

If you believe that, I have a bridge in Arizona you might be interested in...

wizardry

@140.254.245.x

Re: Utter nonsense!

They must have surveyed yuppies since they rank internets above school quality

Mr Guy

@charter.com
said by elray:

Please, someone, anyone, show me comparable homes in comparable neighborhoods, where the sole distinction is poor broadband, such that I can buy them for 20% less.
Even at the very low US median of $188K, that's over $35K in savings.

The website's sampling methodology is complete garbage - it is counting browser search selections, not correlating sales prices to actual broadband speeds.

You do realize this was in the UK.
elray

join:2000-12-16
Santa Monica, CA

Re: Utter nonsense!

Yes, I do. Did Karl disclaim so in the headline?

UK homes cost substantially more than the US, so the premium would be even more extreme, even before you consider the tax factor.
bpratt

join:2006-10-24
Redwood City, CA
I think the issue is that a home buyer typically has many options to choose from. If one home has no broadband, the home buyer will cross it off the list unless it has a substantial discount associated with it, just like a home next to a train track, in an airport flight path, etc.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
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Re: Utter nonsense!

Yes, however, the article and the choir here is stating that lesser broadband yields a 20% discount on purchase price.

I'm calling BS.

People looking at home listings on web sites does not equate to closed sales, which is the only legit source of data for purchase prices.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
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watch closely...

with all the anti-consumer moves being done by AT&T, Verizon and Comcast.. that puts plenty of homes in the lower value category! WEST VIRGINIA THANKS YOU, VERIZON!
you can also look at another calculus-- the horrible state of competition between providers and their broadband costs.. that also puts a crimp on affordability. if you can get broadband and not afford it, what good is the home you buy/rent?!?
while I'm not going to say that Kansas City Ks & Mo are going to go up in value just because google fiber landed... but it's quite possible a city like Austin TX could end up with real estate values similar to that of California.

With some luck maybe there will finally be political pressure put on incumbent ISPs to keep deploying faster networks and offering MORE for le$$, instead of LE$$ for MORE.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
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Re: watch closely...

said by tmc8080:

...
while I'm not going to say that Kansas City Ks & Mo are going to go up in value just because google fiber landed... but it's quite possible a city like Austin TX could end up with real estate values similar to that of California.

Not to worry, KC, KC, and Austin housing markets aren't going to see a fiber bump.

People price homes based on employment and schools, not broadband, and in terms of broadband, they don't want to pay $70/month, and they aren't seeking gigabit or 100M service.
tabernak

join:2013-08-10
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It was a concern for me

I bought a house last year and every house that interested me I checked on the broadband prospects before considering it. I was concerned with getting a somewhat rural location with a couple acres and knew if I got a place that didn't have it now, I may never get wired broadband. In the end I was fortunate and found one with a couple acres that had At&t 6 Mb DSL. A few months after I bought it, they upgraded us to U-verse and now I have 18/2 and one of my first thoughts was how it'd help my property value.

Who knows if the 20% holds up in the US, but I suspect there's some truth in it. Also, there probably tend to be corresponding factors that play into that figure. Houses in cities are typically more expensive and typically have broadband, but obviously they're not more expensive just because they have broadband.....