Real estate experts share with Inman how 5G technology will eventually impact smart-home tech, data aggregation and our cities.
Over the past year, cell phone companies and manufacturers have been racing to lead the charge on fifth generation cellular network technology, better known as 5G. This fifth generation will increase data speeds, vastly improve our device response times and allow us to connect more devices than ever before.
Rolled out earlier this year, 5G is currently in select markets such as Los Angeles, Las Vegas, Dallas, Houston, Chicago, Kansas City, Minneapolis, and New York. Verizon, Sprint, AT&T, and T-Mobile are racing to claim their stake as the 5G authority in each area, with widespread access in 2020 as cell phone manufacturers begin rolling out 5G-optimized devices.
For the average person, 5G means not getting stuck at 99 percent as you’re streaming a Netflix movie, not waiting on Google Maps to upload directions and not searching around for the best Wi-Fi spot because you already have all the speed you need in your hands.
Beyond the everyday convenience that 5G will provide, however, the technology has some interesting implications for the real estate market in terms of smart-home technology, real estate data and aggregation, and in coming decades, how our very cities will be redeveloped and structured.
Three real estate experts sat down with Inman and shared the top three ways 5G will impact the industry. Here’s what they had to say.
Smart-home technology will enter a golden age
Smart-home technology has improved by leaps and bounds over the past five years with voice-controlled devices like Alexa, Bluetooth-enabled home appliances, refrigerators with built-in interfaces that allow for digital to-do lists, video streaming, online searches, and in-app home monitoring and security.
Despite the popularity these items have found within the real estate and technology industries, HomeAdvisor smart-home expert Dan DiClerico says these tools have failed to become mainstays with the average consumer.
“[Smart-home technology] has kind of struggled to get past the early-adopter phase and into the mainstream consumer market,” he said. “But 5G has the potential to address a lot of the headwinds that has kept smart-home technology back.”
According to technology experts, 5G is expected to improve the latency of our devices, cutting down the time it takes to connect to less than a second. DiClerico said improved latency addresses one of the main pain points with smart-home technology — it takes too long to connect everything.
“There are so many connected devices coming online that it causes a ‘traffic jam’ for homeowners and other consumers,” he said, while noting the average homeowner has at least 10 connected devices. “That kind of a pain point wouldn’t be an issue with 5G.”
Beyond increased speeds, DiClerico anticipates that 5G will simplify the connecting process by allowing devices to use a single wireless protocol. Right now, our devices use multiple protocols to connect, including zigbee, Z-wave and Bluetooth.
“There’s an issue with competing wireless protocols. Consumers are confused with how their devices connect, and one device will work with one protocol and not another,” DiClerico explained. “With 5G, [devices] will have an omnipresent protocol.”
“Every device will be able to connect to it seamlessly, and it will remove a major pain point for consumers and the industry,” he added.
But as with all innovations, 5G will offer up new problems while solving old ones. DiClerico said 5G doesn’t go through walls particularly well because it relies on a millimeter wave signal, so homeowners might need to invest in signal boosters until 5G network towers become more widespread.
“I do think it will get worse before it gets better because it’s a period of transition,” he said. “So, in a home, that could create some issues, but that will be dealt with in time. In the meantime, you’ll need Wi-Fi boosters to get everything up and running.”
DiClerico said it will be a few years before the effects of 5G are truly felt in the smart-home industry, but he’s excited about he possibilities.
“I think that will be felt through any smart-home products where latency has been an issue,” he said. “We’re talking about cameras and any devices that use image processing. We’ll see a greater adoption of camera technology throughout the home.”
There will be greater access to more data than ever before
Real estate thrives on data, and Attom Chief Data Officer Richard Sawicky says 5G will provide us with more data than we can currently handle.
“We’ve heard commonly in the data space that companies are drowning in data. Well, guess what? That means the current tidal wave of data is going to turn into a galactic tidal wave,” he told Inman.
“While we’ll have access to unprecedented kinds of data, the ability to aggregate that cleanly and make it usable to companies and consumers that need it is going to big part [of data aggregators’ success].”
Sawicky said real estate companies have just now figured out how to harness the data they’ve been able to gather from consumers and databases, and those who figure out how to mine and synthesize the data that will come as a result of better connectivity will have a leg up on the competition for years to come.
“I see it as a digital goldmine out there just waiting for miners to come by and harvest information,” he noted. “There’s going to be a challenge for companies not unlike Attom, really, to leverage that information and get it to those analytics companies, those applications, and those consumers that can make the best use of it.”
“The companies that can figure out how to string [data] together and make it useful for different [consumers] will be in a very compelling marketplace,” he added.
Sawicky says this tidal wave of data will push cities, states and multiple listing services (MLSs) to standardize the data they gather on properties in terms of how they organize it so Realtors and other professionals will be able to use it.
“The other piece of that is in real estate data we have access to various public records sources, MLSs and for years they’ve been trying to standardize MLS listing data,” he said. “And we know precisely in our space here that the counties manage sales transactions and taxes differently from county to county.”
Just like DiClerico, Sawicky said it’s going to take a few years for data aggregators and analyzers to figure out the best methods, but once they do, it will provide real estate with unprecedented insight into what makes consumers tick.
Consumers will come to expect it
Zillow Senior Housing and Urban Economics Director Issi Romem believes 5G will transform consumer expectations in the same way that the advent of central heat and air transformed the home.
“Nowadays, we take it for granted that we have electricity, a refrigerator and running water in our homes and [those] things weren’t obvious or expected not that long ago,” he said. “I think expecting to have 5G connectivity and be able to download and upload with low latency and very fast speeds from anywhere from any device without any extra infrastructure or needing to plug it in — it’s going to become an expectation.”
With that, cities will need to restructure to accommodate the smaller cell phone towers that 5G requires. Instead of the huge, lumbering towers we’re used to, 5G requires smaller, more numerous towers to keep connection speeds.
“5G is going to be somewhere in between where the cell sites are going to be much closer, and they’re going to be much smaller. I don’t know exactly what they’ll look like, but I’d imagine you could hide them in the backyard, the front yard or even on your roof,” Romem said.
“Whether this will garner the same health concerns as larger cell towers, its hard to say. But, they’ll not be all that different from the Wi-Fi we all don’t seem to mind having in our homes anyway.”
As 5G becomes more common, Romem said he sees access to 5G becoming a selling point especially for homebuyers who live in rural or less densely populated metros.
“It’s not hard to imagine that our property pages on Zillow will say ‘this house has good coverage’ or that it has coverage for this provider and not that one or it doesn’t have coverage at all,” he said. “If your house comes with $500 a month of extra rent money from Verizon [for hosting a small tower], that may be something worth mentioning on a property page.”
In the longer term, Romem predicts that 5G will be the groundwork for other technologies, such as self-driving cars. And once self-driving cars are commonly used, Romem said distance will no longer become a driving factor for buyers.
“The day the cars are all self-driving, you’ll be able to do things like forgo traffic lights and have an algorithm that allows cars to pass through an intersection without crashing into each other, and it makes it such that you can travel five miles much quicker than you can do today,” he explained. “One of the pre-requisites is low latency, and 5G is a big step in that direction.”
“That can have large effects in terms of real estate,” Romem added. “If the range of area that we can get to in a short amount of time grows, that essentially means that we have more land in our city and that can effect what the built environment looks like.”