Three Ways Driverless Cars will affect the Real Estate Industry
Driverless Cars affecting the Real Estate Industry
Are you ready for the driverless revolution? I am sure you have heard about how driverless car technology is being advanced at a fast pace with many believing we will see a flood of driverless vehicles on the road in less than five years. With this in mind, I bet you are surprised to hear that many believe that this transportation revolution will have profound effect on real estate.
Yes, you could almost consider driverless vehicles a real estate technology as industry experts are predicting some major changes to the real estate market when we see start to see cars without drivers. It will radically affect how you buy a home, use Realtors and invest in the industry. How is this possible? You are in luck as we explore three main ways our real estate future is about to change.
Where We Live and Play
Right now, location is high on your criteria list for a perfect home. Your real estate agent will not be surprised to see it at the top of the list. You want to be close to work to alleviate some of the commute time while being in an area that matches your own unique lifestyle.
Gina Michelle at Forbes has a great article going over five ways driverless cars will change real estate. One factor she highlights is how the density of where people are living will change radically. You will no longer have to live as close as possible to where you work as you will have time on the commute to work on business instead of focusing on driving.
If you want to live in a suburb two hours away, you can as the commute time no longer matters. Of course, this fundamentally changes the values of residential real estate closer to major urban centers. The downtown condo will no longer be outrageously expensive because of its close proximity to employers. Location, Location, Location might no longer be the mantra of the real estate industry as the phrase takes on a whole new meaning. You also won't have to move as much.
Michelle uses the example of elderly individuals being able to stay in their homes longer because they no longer have to worry about driving a vehicle at an advanced age. Our homes themselves will change as you will no longer have a need for a garage to house a vehicle. You can use that extra 500 square feet for something else, and leave "nice garage" off your criteria list for your real estate agent.
Value of Transit Hubs
In many major cities, we have seen a major movement towards building transit hubs for residents to utilize for their daily commute to work. Boston has upgraded their public transit as has Austin and Kansas City. These urban centers see an advantage for employers to be close to where their employees get off public transportation.
Ely Razin at Forbes has a great post about how driverless technology could disrupt the industry in the future. In the article, he writes about how vehicles with no drivers could cause a shift in the industry in one of two ways when it comes to value of these transit hubs.
With less car ownership on the horizon, many people will rely more heavily on public transportation to get around where they work and live. On the other hand, if driverless technology becomes economical on the road by reducing congestion and commute time, then people might abandon public transportation to go with the more convenient option.
There are even movements in some parts of the world to make public transportation driverless such as nine person shuttles or even full buses like China tried last year. Property values around transit hubs will most likely see a major depreciation while other locations housing offices might appreciate since the close proximity to transit hubs are no longer a factor for employees.
Commercial Real Estate and Parking
With less cars on the road, there stands to reason that many of our current embedded commercial real estate will no longer be needed. Deborah Findling from CNBC writes in her article on self driving cars that two major industries will go extinct.
Parking Lots will no longer as needed as much. Why? Razin explained his post that the ideal driverless vehicle set up would be where a car picks a person up to take them to a destination and then do it all over again with another person, eliminating the need for cars to park. If the car did need to park, then it could easily travel somewhere more remote as there would be no need to have the car close at hand.
Architects and developers have already taken this into consideration when planning new buildings. Findling writes that most building projects take four to five years to complete so buildings being planned now will have to consider the fact that there might not be a need for parking in their buildings.
Gas Stations are the other commercial real estate that will change radically with vehicles without drivers. One hundred and twenty five thousand gas stations will no longer be needed as driverless cars will have central locations to go fill up with gas, or charge their batteries.
Razin took the commercial real estate evolution one additional step by examining how these abandoned parking lots and gas stations will be reimagined. What will they turn into? He doesn't know but the rededicated spaces will add a possible new sector of commercial real estate.
Our future is bright with driverless vehicles as we will no longer have to worry about driving. In a way, vehicles without drivers is a form of real estate technology as it has the potential to radically change the industry. The location factor will change for anyone looking to buy a home.
People will no longer have to live near their work. Transit hubs will be greatly affected as public transportation becomes less important affecting the real estate values around them. We will see a major shift in commercial real estate as mainstay enterprises like parking and gas stations will become extinct, and new commercial real estate will rise up to take their place.