Self-Driving Cars vs Real Estate
April 4, 2018 | Phil Hills
How can self-driving cars disrupt the real estate industry? It seems unlikely that these two industries would be connected, however when we think about proximity, it makes sense why. People value proximity to work, shopping, schools, commuting centers, etc. Proximity and convenience drive value. With AVs (autonomous vehicles) being integrated into the transportation system, commuters have a lot more options and do not have to solely rely on transit hubs. As KPMG reported, “AVs are expected to significantly reduce travel cost, time and congestion while increasing safety” and it also reduces the need for parking spaces.
The use of autonomous vehicles will affect both urban and suburban areas. It can encourage different generations and more suburban people to move closer to the city or visit the city more often since there would be less traffic. This would further increase home prices in urban areas. Since AVs would increase travel efficiency, it would give people more time to do work on the commute or sleep in, therefore stimulating value in suburban areas, and areas farther away from the city. AVs not only affect residential real estate but also commercial. Assuming that AVs can drive themselves back after dropping off a passenger, the demand for parking lots would decrease, so what will happen to those parking lots? The answer is not clear, but with governments supporting AVs on the road, in my opinion, self-driving cars will affect home values within the next couple of years. What industry do you think will attempt to stop AVs from commercializing .... insurance industry?
Comments (2)
Interesting take, and I think you're right. A couple of years ago I was sitting in on a presentation a local developer was giving about their development plans for the next 5-10 years. Part of the plan was a parking garage down the street, in a location that wouldn't normally be convenient, but he anticipated self driving cars would be going there to park themselves by the time this project was done. It was something I had never even thought of before.
Kevin Vandenboss, almost 7 years ago
Wow this world moves fast! Pretty strange I live in a 110 year old craftsman house and we're talking about self-driving cars! Do you think this will keep millennials close to the city or promote smaller areas for when you are being driven you can work, relax,sleep?!
Phil P Hills, almost 7 years ago