Driverless cars could have substantial impact on real estate, affecting everything from how communities are designed and whether or not people are likely to age in place, according to Bisnow.com.
Rick Palacios Jr., director of research at John Burns Real Estate Consulting, Irvine, Calif., wrote in a recent article that there are major changes that could occur to the real estate industry when driverless cars hit the market. And these shifts could impact the way residential real estate agents do business.
Potential changes of driverless cars on real estate
Among those changes is one that seems counterintuitive: Palacios suggests that demand for housing in outlying locations might be less at first, even though commuting will be easier. Why? Parking lots, auto dealerships and gas stations won’t be needed, creating an opportunity to develop prime real estate areas with housing options. But eventually, when those markets have been repurposed, people will gravitate toward the outlying markets. Their thinking, according to Palacios, might be that commuting isn’t so bad, now that they can work, sleep or do other things while cars are driving them to their destinations.
- Repurposed real estate in prime locations will allow more people to live closer to urban centers, again, because they’re more accepting of commuting with a car they don’t have to drive. And drive times should be shorter with driverless technology, according to Palacios.
- With less need for big driveways and two- and three-car garages, there will be more room for homes. So, home densities in communities could rise, as use of and need for traditional cars falls.
- Construction costs should trend down, as transportation costs associated with materials used for building homes, condominiums and more also decline and become more efficient. Even labor could become more accessible, improving the entire building process.
- According to Palacios, people might be less likely to move as they age because transportation won’t be as much an issue. This, in turn, could mean a boost to the repair and remodel industry.
- That’s not to mention the broader economic impact of driverless cars, which includes potentially more disposable income because people
ETA and limitations
The big question is when will driverless cars rollout into the marketplace? Cities and governments, according to Bisnow.com, haven’t yet determined how to regulate and plan for driverless cars.
According to a report on the subject by National Real Estate Advisors, the Google Car is predicted to be on the market by 2018. And the automobile industry predicts driverless cars will be for sale in 2020. Fully autonomous vehicles might be common in 10 to 20 years, according to Palacios.
However, hurdles remain, according to National Real Estate Advisors. To date, driverless cars have trouble operating in the rain and aren’t optimal in city traffic.
Widespread adoption of driverless cars won’t happen unless the public trusts technology, according to National Real Estate Advisors.
What are your thoughts on self-driving cars? Do you think they will have a major impact on real estate? Share with us!