NEW YORK – Oct. 27, 2017 – Self-driving cars (AVs) will have a big impact on the real estate industry, according to Rick Palacios Jr., director of research for John Burns Real Estate Consulting. As consumers take their hands off the wheel, they may find different needs in housing over the next 10 to 20 years, which is when self-driving vehicles are expected to make their mark.
For example, distant suburbs may grow in demand as driverless cars ease commutes, Palacios says.
“Outlying drive-until-you-qualify housing markets will eventually reemerge once the majority of core infill markets have repurposed their prime real estate and consumers become more accepting of commutes given the option of working, sleeping, etc., while driving,” Palacios says.
Palacios also predicts that density in real estate will increase. “The days of wide streets, massive driveways, and two- to three-car garages are a thing of the past,” he says.
Prime real estate will also be unlocked for new home construction. Places once used for parking lots, auto dealerships, and gas stations will become obsolete with self-driving cars. That may free up prime real estate for housing, Palacios says.
“Builders will be able to get significantly higher density, and consumers will be buying a home where 100 percent of the square footage is livable,” Palacios writes. “We’re already seeing apartment developers shifting to zero parking. Innovative master-planned communities such as Florida’s new Babcock Ranch are already utilizing [autonomous vehicle] community shuttles, with the goal of having on-demand AVs that individual residents can use via smartphone apps.”
Older adults may also be more likely to stay put in their homes longer after losing their driving skills. That means an increase in repairs and remodeling as seniors opt to remodel their homes and age in place.
“We expect the advent of AVs to benefit the overall housing market and greater economy,” Palacios writes. “How it shakes out and who the industry winners/losers will be remain up for debate. For builders and developers not already doing so, it’s imperative to begin strategizing on how your business may shift as AVs gain scale.”