Should Available Internet Speeds Affect The Price of A Home?

Yesterday I was asked a question by a friend of mine, he asked, “Should the Internet speeds that are available in a particular area affect the price of a home?” His question really got me thinking. It’s definitely an interesting question, and in fact, Internet speed was one of the variables I used when I was considering where to move during my apartment search a few years ago, especially since my work involves me being online.

When you are in the market for a new home, there are a few unchangeable factors people take into account, such as the neighborhood/location, schools, and public transit/commute time, but what about adding one more factor to that list: the available Internet speeds. In many cases the first three factors can impact the price of a home causing it to be more pricey or less. You want beach front property? You better be willing to add a few dollar signs to the price tag.

I understand that Internet speed is not a completely unchangeable factor, after all an ISP could eventually offer better speeds in an area, but for all intents and purposes, at the point in time when you are about to buy or rent a home it is unchangeable.

Now I recently wrote about how I’m in the 1% of Internet users within the U.S. and how I feel that we need to provide faster Internet throughout the country, perhaps even implementing some kind of required minimum speed because it is so important. It’s important for the evolution of the web, but it’s also important when you consider that more people are telecommuting today than ever before in the U.S. In fact, over 3 million people or 2.5% of the workforce, not including self-employed people are telecommuting and relying on their Internet connection to get their jobs done.

So should an Internet connection have any impact on the price of a home?

I think it should.

But it’s not just me who realizes how important a good Internet connection is, Wall Street does too. Traders and financial firms are super reliant on Internet connection speeds — the faster and closer to the fiber they are, the better. Why? Because it allows them to execute trades faster.

Now most home buyers will not care about how fast they can execute trades, but they do care how fast they can download content from iTunes.

The thing is, I don’t think most people realize the importance of having a good Internet connection yet, but give it time and I think it will become a real buying/selling factor. One that will make an impact on price and affect the decision to buy.