source: needpix.com

Sign up for our newsletter

These days, homes have become more than a place of respite after a long day. For many of us, they are also where we work or “attend” school and spend nearly all of our leisure time. So having reliable home Internet seems more important than ever…even priceless. However, does having Internet, or fast Internet, translate to higher rural home value?

This was the driving question behind a recent study conducted on two different rural Oklahoma counties (Woods and Pittsburg counties) that experienced a dramatic increase in broadband over the past decade. In Woods County, fixed broadband speeds of 50 Mbps or greater went from nonexistent in 2011 to available in more than 40% of census blocks in 2017, according to FCC data. Over those same six years (2011-2017) Pittsburg County also saw census blocks go from no broadband coverage to 24% coverage at 50 Mbps.

While both had similar impressive broadband deployment increases, they differ in topography and population. Woods County is comprised of “irregular plains” and is sparsely populated (2017 county population estimate of 9,132). Pittsburg County boasts a lake and a larger 2017 county population of 44,673. Overall, these two counties provide a good lens to examine the role that increased broadband plays in the housing prices in two different rural areas.

To explore this issue, we matched housing transaction data, including home and area characteristics, with the existing broadband coverage at the time of the sale (2011-2017). (We didn’t include satellite access in this study.) We then ran models to determine the “value” of each individual aspect of the home or neighborhood characteristic attributed to the actual home price. We expected to find that being located in an area with “good” broadband coverage would add a premium to the sale price of the house.

In some ways, results were as expected. House size, the addition of a fireplace, number of bathrooms, and total acreage were all positively associated with a higher home price in both counties. However, our models did not find a significant housing price premium for any measure of home broadband. After controlling for other housing and neighborhood characteristics, we did not find any price increase for rural homes located in an area with good connectivity.

This may be because the “very fast” networks of over 50 Mbps only began emerging in these counties after 2015, and may not have had enough time to make a statistical impact. We also note that we excluded satellite coverage from our analysis, but Census data show that 14% of connected households in each county choose this technology (higher than the 10% average in the state). Some house hunters may simply be assuming they can get satellite coverage if a potential residence does not have good terrestrial access.

It is important to note that while we did not find a broadband premium for connected rural homes in these two counties, these results shouldn’t be used as a blanket statement for all rural households. Prior research using national county-level data for all remote rural counties found that houses where broadband is available are worth more than houses without broadband availability. This previous study did not account for the individual characteristics of houses being sold, however. Our study highlights the importance of conducting small-scale studies to assess how applicable larger-scale results might be.

One of us is a young professional looking into buying her first house, and good Internet access is a requirement. However, in searching through real-estate apps such as Zillow and Redfin, no “connectivity” or Internet information is automatically provided. Instead, I find myself calculating commutes, comparing square footage, and checking to see if the basement is finished or not. While all these aspects are important to consider, I also believe the Internet is crucial to any 21st-century living situation. It might be the case that new homeowners assume their home is equipped with a good Internet connection only to find it difficult to post a picture of their new country abode online.

Kelsey Conley is a postdoctoral scholar at the University of Idaho and Brian Whitacre is a Sarkeys Distinguished Professor at Oklahoma State University, respectively. Their study was recently published in International Regional Science Review and is entitled “Home Is Where the Internet Is? High-speed Internet’s Impact on Rural Housing Values.”