Is Focus on Location a Thing of the Past?

Nearly each major company is experimenting with driverless transportation, conjointly mentioned as autonomous vehicles. In fact, Google expects to possess its initial autonomous ride-sharing service on the roads as early because the finish of this year. Apple isn’t way behind and is frequently seen testing its vehicles on public roadways.

Autonomous driving is assessed over six levels, from zero to five, wherever level zero represents a automobile with zero automation and level five is absolutely machine-driven. solely cars driving at levels four and five area unit actually autonomous. however Tesla’s increased Autopilot feature is already on the road, providing customers with a self-driving expertise somewhere between levels two and three. returning before long area unit level four vehicles, which can be self-driving solely over piece of land that has been completely prepared in 3D. Level five vehicles are ready to drive on uncharted piece of land.

Though all new technology is costliest to its early adopters, driverless automobiles are prohibitively therefore for the individual car owner. It’s possible that level four driverless automobiles can initial be unrolled to industrial services instead of individual car homeowners. however notwithstanding Americans don’t own their own autonomous vehicles, these cars have the potential to alter land patterns.

Uber CEO Dara Khosrowshahi same in January that he wished his self-driving cars to be memorizing passengers as before long as next year, which twenty p.c or a lot of of its fleet may become driverless. Ford has already partnered with Domino’s and Postmates to deliver packages and pizza pie in an exceedingly automobile that seems to be self-driving. If we will get wherever we want to travel and have product quickly delivered notwithstanding wherever we tend to live, is location still as necessary as we tend to think?

It is too early to grasp the result of this new technology on the $64000 estate market with absolute certainty, however we will scan the clues disclosed by current trends.

Different Cars, totally different Use Cases for industrial

According to the eTravel Report 2018 compiled by client knowledge firm Statista, 17.8 p.c of people presently use rideshare services, that is foretold to grow to twenty three.1 p.c over subsequent four years. If, for sure, most driverless cars area unit unrolled as a part of a transportation or subscription service, individual automobile possession is predicted to decrease.

This decrease in automobile possession can have a ripple result on parking heaps. to urge a plan of the scale of this market section, contemplate that Andy Cohen recently calculable in an exceedingly Gensler report that “America’s parking footprint, calculable at five hundred million parking areas, consumes a lot of land than Delaware and Rhode Island combined.” firm McKinsey & Co. estimates that “autonomous vehicles may scale back the requirement for parking lot within the U.S. by quite sixty one billion sq. feet.”

These sixty one billion sq. feet of freshly accessible land have the potential to flood each the industrial and residential land markets, as several of those areas in urban areas can possible be born-again into multifamily flats and condominiums, feeding the shift toward urban centers. the rise in offer may drive land costs down in some cities.

Redefining Residential Demand

These changes in transportation patterns go way on the far side wherever and once we park our vehicles, however. With driverless cars, individuals will live a lot of farther removed from their jobs, and may use their commute time to conduct business undistracted. Autonomous vehicles may conjointly permit individuals to remain in their homes longer, particularly the older, WHO area unit typically compelled to maneuver nearer to town centers or to full-service communities once they will not operate a vehicle safely.

Some business watchers say this can be already dynamical calculus for wherever Americans settle. MetLife recently discharged a report that found port of entry residences that wont to command a twenty one p.c larger rent thanks to transit proximity leveled off to a fifteen p.c premium once the introduction of Uber and Lyft. “People area unit already willing to pay slightly but they were before for a similar level of transit access, as a result of they currently have this complementary transit system,” Adam Ruggiero, head of land analysis at MetLife Investment Management told Bloomberg.

But before we tend to throw the proverb “location, location, location” beneath the bus (or driverless automobile, therefore to speak), it’s value noting there’s one issue driverless cars have very little result on, which can perpetually demand a premium in real estate: time. whereas it is argued that passengers in driverless cars use their time a lot of fruitfully, commutes still equate to time that would be spent doing alternative things, specifically leisure, sleep, and most significantly, time spent with white-haired ones. After all, time is that the one artefact which will ne'er get replaced.

A couple of years past, statisticians at fivethirtyeight.com analyzed the costs of Manhattan land in reference to its distance from public transportation, and located that New Yorkers were willing to pay an extra $56 a month per minute beardless off of commute time. although driverless cars have the potential to show any location into a transit access purpose, time incorporates a worth, which individuals can perpetually be willing to pay. however the need for an excellent location isn’t just regarding traveling to figure. As FiveThirtyEight’s Carl Bialik notes, “Places with short commutes also are typically places with alternative fascinating characteristics: restaurants, nightlife and convenience.”

Because location may be a true place, and not simply a node in an exceedingly transit system, it'll take quite autonomous vehicles to knock “Location, location, location” off its perch within the lexicon of land professionals. Driverless cars might modify the $64000 estate landscape, however a minimum of for the short and term, location can still drive land worth.