Broadband Increasingly Important In Real Estate Decisions

Posted on: Thursday, 6 November 2008, 14:50 CST

Broadband Internet service has gone from a luxury to a necessity for most people in recent years.  For many, including Adam and Anita Paulk, it’s become a significant factor in making real-estate decisions. 

Case in point the Paulks, who had a nice home just outside Temple, Texas, including a large yard and the convenience of being only 10 minutes away from Mr. Paul’s job. However, there were no service providers able to offer a high-speed Internet connection to the home. So three years ago they decided to build a home in a new subdivision, sacrificing a short commute for a high-speed Internet connection.

"It was worth it, not to hear my husband bitch about the connection anymore," Anita Paulk told the Associated Press.

The growing importance of Internet connectivity can be seen throughout the country, as areas with faster broadband connections become more attractive to potential buyers than areas with slower access.

Areas with better and faster broadband are becoming more desirable than ones with slower access. 

Real estate broker Edward Redpath of Hanover, N.H. said he has seen potential deals fall by the wayside once the buyer finds out a home doesn't have broadband Internet access.  Across the river in Norwich, Vt., the center of the village is the only place with cable.

"We have a lot of people that don't go into the rural neighborhoods or consider the rural neighborhoods because they need the broadband," Redpath told the AP.

"Our lifestyle demands speed."

Many factors are at play in driving the trend, including our increasing reliance on broadband. Indeed, roughly 55 percent of Americans have broadband connections in their homes, according to the Pew Internet and American Life Project. However, more have service available to them and choose not to buy it.

But the growth of broadband is slowing, and providing connections to the remaining 10 percent of unconnected homes will be expensive since these homes are typically in small communities or in remote locations. As time goes on, the lack of universal broadband combined with higher gas prices might draw people from the countryside to cities and suburbs.

Redpath’s local phone service provider, FairPoint Communications Inc., is turning to unconventional means to connect the most remote Vermont homes. The company will begin using wireless broadband links next year to keep its promise of providing high-speed Internet access throughout its entire service area.

Wireless broadband coverage from cellular carriers is also growing, but still must follow major roads and population centers.  And even where it is available, it's typically not as fast as wired broadband, and there are limits on monthly downloads.

Although satellite broadband is available nearly everywhere as a last resort, it comes with tradeoffs, including strict limits on the amount of data a subscriber can download. Additionally, some activities such as online gaming are impossible due to the amount of time the signal takes time to travel out to space and back.  And satellites simply don't have the capacity to serve everyone without broadband connectivity.

The disparity of broadband access has led to calls for action by the federal government, which has until now stayed out of the issue.  Federal Communications Commission (FCC) chairman Kevin Martin recently suggested using the Universal Service Fund, which subsidizes phone service in rural areas, to fund broadband coverage as well.

Even in developed areas, broadband has become an important factor for some people in deciding where to live, particularly if they work from home.

For Daniel Skripka, a move to Chaska, MN, where Internet access through a municipal wireless network costs him $18 a month, made sense after downtown Minneapolis became too expensive.

Skripka uses the wireless connection as a backup when he's working from home and his DSL connection cuts out, something that happens about once a month.

"The most important factor for the location was the availability of reliable Internet," Skripka told the AP.

The standard in luxury apartment buildings is to have at least two options for broadband Internet access, said Henry Pye, director of resident services and technology at JPI Partners LLC, which owns buildings throughout the United States.   Pye’s job is to ensure the buildings have broadband connectivity, because you can't rent out apartments without it, he said.

"It might as well be water," he told the AP...