That place where the internet and real estate values meet

My Grandma never considered the internet when buying her first house, but these days it’s on all of our minds. Think about it this way. Would you buy a house if internet access was going to be impossible for some reason? Assuming we’re not talking about a secluded cabin somewhere, it’s safe to say most buyers would have a huge problem with that (not just Millennials either). Yes, there would probably be a value impact to not have internet, but the really intriguing part begins when we consider that what happens online or digitally at or around an address can also potentially impact value. This wasn’t even a part of the conversation just a handful of years ago, yet here we are.

Guy on computer - Image purchased by 123rf dot com and used with permission by Sacramento Appraisal Blog

Digital World Meets Real Estate: A few months back I heard of a house in Kansas that had 600 million IP addresses pointed toward it. If you don’t know, every computer has what is called an IP address, which is basically a string of numbers to identify that individual computer. Well, in this case due to a company’s digital mapping error it looked like 600 million computers were being used from this one location in Kansas, which led to a whole host of problems for the occupants. As the article states, the owners and tenants have “been accused of being identity thieves, spammers, scammers and fraudsters. They’ve gotten visited by FBI agents, federal marshals, IRS collectors, ambulances searching for suicidal veterans, and police officers searching for runaway children. They’ve found people scrounging around in their barn. The renters have been doxxed, their names and addresses posted on the internet by vigilantes. Once, someone left a broken toilet in the driveway as a strange, indefinite threat.”

Yikes. Assuming buyers knew about the IP address problem and unwanted visitors and threats, couldn’t a mistake in the digital world cause buyers to pay less? Or maybe renters would pay less? Appraisers, would this be considered external obsolescence?

BIG POINT: What happens online or digitally around an address just might impact value. Think of the advent of Pokemon Go and how a digital game has the power to bring customers to commercial properties or maybe even help increase use of neighborhood parks. Remember, if you’re tired of hearing about Pokemon Go, don’t worry because there will be many more games just like it in the near future. Again, the digital world and real estate are colliding, and we can expect more of that in coming years.

Pokemon Go Real Estate

Questions: Would you buy a house without internet capabilities? What other types of activity online might impact a home’s value?

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  1. JOE LYNCH says

    I would not buy a home without a good Internet connection. Cost to cure might be a starting point for an adjustment.

    Time for everyone to read William Gibson.

  2. says

    When I appraise a house, one thing I do is Google the address to see what comes up. One house I was about to go appraise had recently had multiple murders happen in the house and the trial was still underway. I know that Googling the address might not find the IP address problem, but it can be surprising what comes up. Sometimes Google uncovers value issues. Most often I find past listings or complaints from neighbors about abandoned cars or noise.

    • says

      Great example Gary. Thank you for sharing. That’s a good reminder to always Google the address. I wonder if services will arise to help prospective buyers find the home’s “digital footprint” so to speak. Or in other words, I wonder if there will ever be a digital ranking or score given for certain homes or even neighborhoods based on strength of internet connection, services provided, Pokemon Go, or even how often and where an address pops up online. We are only at the forefront of this….

  3. says

    Wow, all great questions Ryan. Seems to me that privacy issues may also come into play here somewhere, although I’m not sure where. Seems like if online references to a certain address caused disruption in living or even a decrease in value due to wrong information this might be cause for some kind of lawsuit. Seems like the digital can of worms has been opened.

    • says

      Exactly. When I read about the house in Kansas I was wondering if there would be litigation. Thankfully the mapping company recognized their mistake and is now pointing the IP addresses at a location without a house on it. But that doesn’t necessarily mean all has been corrected online for this household. These are interesting times.

  4. mr. miyagi says

    Danielson, Isn’t sattelite internet available anywhere now? IE Hughes Net. Not to undermine your entire premise but I thought that was available 🙂 Couldn’t agree more though about it being a real lifeline and critical to a real estate buy. It actually was a huge factor in the last property of mine I sold. The new buyer could not get new ATT DSL service (the no longer are taking on accounts there) because it is rural and I had to keep the account in my name so the buyer could continue the service. Correct me if I am wrong about Hughes Net. Sayonara. -Miaygi

    • says

      Sensei, this is a hypothetical question about not having internet to bring home the point of how important it is. It’s rare in the suburbs to deal with a lack of internet, though I suppose a spotty signal could be an issue in some areas, and I imagine buyers would be miffed over that. Being that internet really wasn’t important in our homes even 20 years ago (or when your movie came out in 1984), it’s striking to realize how important it is now. I’m not up to speed on Hughes Net, so I can’t speak to that. I do know there are some creative options for internet in rural areas though. It’s interesting to hear about the DSL service. Hopefully the new owner can figure out a new account at some point so your name doesn’t have to be on there for the next 10 years. 🙂

      • says

        Rebekah G., here! Recently I was blessed to find and buy a home in the Sierras. Hughes Net is not popular here. Satellite communication is easily blocked by mountains and trees. My new internet company climbed 55 feet up a pine tree to aim the dish to another relay station that was not in the trees. Oh, the joy! We are expecting fiber optics any year now! Everything is just a little slower up here, and that is why I love it!

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