“Close to transportation and shopping,” might not carry the same weight it does now in 20 years’ time. That’s because with the rise of self-driving cars, everywhere might be close to transportation and shopping.
As self-driving cars become more integrated into our society, remote locations will no longer be inconvenient. Instead, all that will be left is the pleasant feeling of privacy. That could do a lot to current home values, and while it's still speculation at this point, some investors think this new transportation technology could reshuffle the deck for the real estate industry.
In today's property market, a home or office that is centrally located carries a higher value. Nearness to public transport and necessities like grocery stores and schools drives the value of property up. However, when a self-driving car can pick you up at any location, there's no need to live in the city center.
As we transition to an infrastructure that relies wholly on self-driving cars, roads will be less congested, travel cost will go down and safety will go up. This supports the idea that living further from amenities and urban centers won’t constitute much of an inconvenience.
The Value of Parking
It's estimated that the average privately owned car sits unused 95 percent of the time. Vehicles that aren't in use need storage, which explains the number of driveways, garages and parking structures we have in this country.
In a world where unused cars no longer clutter the landscape, that two-car garage doesn’t look so attractive anymore. A mall no longer needs a monumental parking structure divided into sections A through Z where shoppers can leave their cars. Instead, a relatively small pool of driverless cars — enough to provide for patrons who are ready to leave — is all that’s needed.
It's a significant change and one that's expected to reduce the need for parking space in the U.S. by over 61 billion square feet.
One of the first markets to see significant changes as a result of self-driving cars is the commercial trucking industry. While first-generation self-driving trucks are expected to have humans ride along, the maturation of this business model could see the definition of a truck stop change entirely.
Without the need for facilities for drivers to use, commercial shipping logistics areas could be placed in much cheaper locations. To quote Bloomberg.com, “an entire network of truck stops, motels and gas stations could fall in value if vehicles no longer need drivers.”
The World According to Bob Lutz
If there’s one man who can speak to trends in the automotive industry, it’s Bob Lutz. The current head of product development at General Motors has held positions on the executive teams of all three major American automakers, as well as BMW and Opel.
It's important to note that all these changes are decades away, but Lutz predicts the auto industry itself will change. As driverless cars become the standard, new market leaders will emerge, and the infrastructure of gas stations, repair shops and parts stores will all dissolve around them. So the self-driving car will not only revolutionize real estate, it could reshape the auto industry as well.
All these changes will, of course, happen gradually over the next several years. The first instances of change might be visible in grocery delivery cars or new neighborhoods designed with less parking space. Keep your eyes and ears open, and you’ll see the transformation unfold. Just don’t get lazy, because your real estate investment could depend on it.
Nathan Sykes enjoys writing about the latest trends, news and advice on all things business and technology. To read more by Nathan, check out his blog, Finding an Outlet.