Effects of Internet Infrastructure on the Real Estate Market

Many tasks have been heavily dependent on high-speed internet, and it has been highlighted by the COVID-19 pandemic. Over the past few years, a massive portion of the population has been relying on broadband to study, connect with friends, and generate income. Unfortunately, the digital divide has been preventing many Americans from accessing many opportunities due to a lack of reliable internet connection in many areas of the United States.

The recent legislation involving the Infrastructure Investment and Jobs Act is directed toward helping close the digital divide for underserved areas in the country. With all the attention on internet infrastructure, what does it mean for consumers, property professionals, and the entire real estate industry? Check out how the rapidly increasing demand for fast, stable internet connections has been affecting the real estate market.


Effects of Internet Infrastructure on the Real Estate Market


1. The Shift in Homebuyer Priorities

Traditionally, homebuyers have always wanted to live in a property where there is excellent access to electricity, water, and transportation. While these utilities are not generally available in some rural areas, they are necessities for a normal, comfortable, and modem life in the USA.

As more and more people have been working and studying remotely, stable internet access has become an essential service for many people, for both homebuyers and renters. Fortunately, most rural areas have access to satellite internet, which is not the fastest but can still deliver reliable speeds to get work done.

Now that millennials make up the most percentage of homebuyers, they will likely look for properties with a stable internet connection to work and connect with their family and friends. That said, real estate agents and marketers must keep up with the internet demand as the growth of home office spaces and internet connectivity will become highly essential for students and remote workers.

2. Effect on Property Values

This change in demand has also affected property values. According to a study by the University of Michigan and Carnegie Mellon University, when a single-family home has fiber internet, its value could increase by up to $5,500. However, the added value still depends on the location, especially now that fiber-optic internet is not as accessible as other internet types.

Stable, high-speed internet is becoming more and more important for everyone nowadays. Even some states, such as Washington, have been requiring home sellers to provide information about the internet service in their home listings. This significant change in state and federal policies is just one of the many ways how internet infrastructure has been affecting the real estate market and the country in general.

3. Drive in Federal Funding

Infrastructure has always had a massive role in the real estate market, especially with properties connected to businesses. Traditionally, these are the type of properties most homebuyers, investors, and commercial real estate agents have always wanted. Now that internet connection is a must for most people, internet infrastructure will likely expand in the near future.

In fact, the latest Federal bill for American infrastructure build-out focused on improving broadband connections in all rural areas of the United States. The recent legislation has designated $42.5 billion to improve internet connection and reduce internet costs in rural areas across all 50 states. Even though creating internet infrastructure in rural areas offer little economic return, investing in these locations can encourage buyers to consider buying properties in rural areas—bringing more opportunities for rural residents and businesses.

4. Low Service Competition

Currently, the lack of competition in America’s current infrastructure only benefits the major internet service providers. With fewer options for a home internet plan, internet providers will continue to impose high fees as people have really no choice but to subscribe to connect online.

On the other hand, real estate agents and homeowners can only benefit if their area has multiple options for high-speed internet—as strong competition makes speedy internet connection more affordable to attract more subscribers and promote economic growth. Now that the government has been targeting internet providers, the real estate market benefit may benefit from it.

5. Growth of Commercial Real Estate

Commercial real estate will likely expand as a result of the expansion of internet infrastructure. Industrial warehouses are required to house the necessary technology to support local networks in rural areas. Then, available access to the internet will begin a cycle of improvement by attracting investors, residents, and more networks.

The growth of remote work in rural areas might pave a way for commercial spaces to expand continuously. With that in mind, the increased opportunity for commercial development will go hand-in-hand with the expansion of internet infrastructure across the country.

Effects of Internet Infrastructure on the Real Estate Market


As internet infrastructure continues to change due to organic growth and legislation, the real estate market will face a new set of opportunities for both the residential and commercial markets. Access to high-speed internet connection has become one of the priorities of homebuyers, so real estate agents and markets must begin to catch up with this demand as soon as possible.

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