Hurricane Florence: Nearly $30 Billion in Estimated Losses

By Susanne Dwyer

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Earlier this month, Hurricane Florence blasted through the Carolinas and Virginia, leaving a path of flood and wind damage in its wake.

According to an analysis by real estate data provider CoreLogic, residential properties in the Carolinas and Virginia sustained between $19-$28.5 billion in damage, which includes impact from both inland flooding and storm surge. Of that amount, an estimated $13-$18.5 billion is in uninsured losses. Flood losses insured by the National Flood Insurance Program (NFIP) are estimated to be $2-$5 billion, and wind losses are estimated to be an additional $1-$1.5 billion.

In total, CoreLogic estimates that flooding and wind damaged 487,000 residential homes in North Carolina, 109,000 in South Carolina and 28,000 in Virginia.

The House recently passed a five-year FAA reauthorization with a bill—the Aviation, Transportation Safety, and Disaster Recovery Reforms and Reauthorization—that includes relief funding designed to expedite recovery efforts for Florence-impacted areas. The FAA’s current authorization was set to expire on September 30; however, the House approved a one-week extension and the Senate is expected to vote shortly (at press time), according to Aviation International News.

“…Even today, over a week after the storm made landfall, flooding remains a significant concern for families in both North and South Carolina,” said NAR President Elizabeth Mendenhall in a statement. “In these times, we are reminded of the importance of peace of mind for property owners with access to quality and affordable flood insurance, and maintain our call for Congress to pass responsible, long-term NFIP reauthorization. We commend the House for passing H.R. 302, and urge the Senate to take up this important legislation quickly.”

Dominguez_Liz_60x60_4cLiz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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Beware Location Remorse: Over a Third Have ‘Neighborhood Regret’

By Susanne Dwyer

You can change a house—location is tougher.

According to new research by Trulia, 36 percent of Americans have “neighborhood regret,” or would have moved to another neighborhood than the one they reside in today. The feeling is heightened in metros, where 46 percent are dissatisfied with their pick, but less pronounced in rural areas (31 percent) and the suburbs (30 percent) The portal surveyed 1,000 Americans in Austin, Chicago and San Francisco who moved in the past three years.

What makes a neighborhood suitable? Forty-eight percent of those surveyed were motivated by the “vibe,” 37 percent were affected by crime rates, and another 37 percent were attracted to easier travel to work. Attributes that led to regret? Lack of public transit, noise and traffic.

Is your neighborhood a problem? For future moves, prepare through research. Look up neighborhood photos—something just 38 percent of those surveyed did—and plan a time to visit. Only 37 percent explored the neighborhood’s popular spots, and 47 percent did not go at night. Remember, as well, that your agent is an expert on the local market. Contact them for help with your move.

For more information, please visit www.trulia.com.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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Housing in 2020: Construction Costs Grow, Mortgage Rates Slow

By Susanne Dwyer

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Where will housing be in 2020? According to the latest Metrostudy predictions, if all continues on its current track, construction costs could continue to increase, and mortgage rates could reel in.

While rates have increased in the last six months, impacting affordability, the rise is not significant according to historical trends, says Mark Bound, chief economist and senior vice president at Metrostudy, a provider of primary and secondary market information to the housing and residential construction industries. In the long term, Boud predicts mortgage interest rates will top out at 5.8 percent in 2020 and 2021, eventually being pulled down by slower economic growth—and because of tighter lending practices, the market environment will not become as dire as the last housing bubble.

As for inventory, it is significantly under-supplied, while homes are increasingly overvalued; however, the risk of a price collapse is small due to the tight market, and Boud expects the cycle of under-supply to plateau in 2020. The lack of new inventory is, in part, in response to trade increases, as many of the imposed tariffs—specifically the 20-plus percent tariff on lumber imports, and 10 and 25 percent tariffs on aluminum and steel imports, respectively—directly impact construction efforts.

These factors could lead to an increase in overall construction timelines, as well as an increase in construction costs by at least $2,000 per house, according to Boud. More homes in the upper price ranges are being built, while inventory under $400,000 is lower, in some cases. Overall, the national market is becoming top-heavy, which typically only occurs where land is more expensive, such as in California, Boud says.

Remodeling activity continues to rise in response to homeowners staying in their homes for longer, as well as the continuing trend toward purchasing existing homes, which triggers renovations. According to Boud, this is most common in coastal markets, or markets that have high appreciation rates, such as Texas.

Something to watch? Inflation. Boud says inflationary pressures are slowly building—inflation rose from 2.4 percent in March to 2.9 percent in August—but in a few years, the national debt could slow economic growth, which, in turn, could slow down rising interest rates.

Another concern? The current downward trend of the 2-10 Treasury yield spread, which could see negative figures in about a year, may be a sign that a recession is in the cards.

However, the current economy is healthy, Boud says. In the past 12 months, 2.4 million jobs have been generated, increasing demand for housing and pushing the unemployment rate down. Additionally, housing starts are fairly stable, forecasted to be 1.28 million in 2018, and increasing to 1.33 million in 2019 and 1.345 million in 2020, before plateauing.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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401(k) Auto-Enrollment Connected to Early Withdrawals, With Housing Implications

By Susanne Dwyer

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With Social Security trust fund reserves waning—predicted to be depleted by 2034, leaving Social Security unable to maintain full scheduled benefits—and the number of retirees expecting to receive benefits increasing, more and more Americans are relying on 401(k) savings to support their retirement living. In fact, Statista estimates there are 41.2 million households who presently own a 401(k) plan in the U.S.

How does auto-enrollment fit in with these tax-advantaged savings accounts? There’s a clear benefit, as recently determined by 401(k) record-keeper Alight Solutions LLC in its 2017 Trends & Experience in Defined Contributions Plans report. Far more individuals contribute to a 401(k) with an auto-enrollment feature (85 percent) than to plans without it (63 percent).

While that should lead to higher savings rates and stronger financial health for future retirees, there is a glaring concern: Increases in auto-enrollment are leading to more early withdrawals. According to Retirement Clearinghouse LLC, over 60 percent of 401(k) participants with balances below $10,000 liquidate their accounts after leaving a company, reports the Wall Street Journal.

What’s causing this increase in withdrawals (also known as leakage)? Job changes lead to low 401(k) balances, which are largely cashed out due to company payout checks that can easily be deposited. The alternative? Having to fill out burdensome paperwork to transfer the funds into a tax-advantaged account. Others use their funds as a type of loan regardless of penalties incurred.

Although small loans or early withdrawals may not seem like much in the grand scheme of funds necessary to support retirement living, these can add up to a costly dip in long-term savings. While statistics by the University of Pennsylvania’s Wharton School show that most 401(k) borrowers pay themselves back (with interest), 10 percent default on nearly $5 billion per year.

How will this impact retirement-incentivized real estate? A survey conducted last year by The Hartford Advance 50 Team and MIT AgeLab found that 73 percent of surveyed adults over 45 strongly agreed with the statement “What I’d really like to do is stay in my current residence for as long as possible.”

That may not be achievable for a majority of retirees. Less funds to support retirement living may lead to more move-down buyers, as retirees struggle to pay off remaining mortgage debt on bigger homes while also maintaining their current costs of living. Additionally, aging in place no longer means simply staying in their current home, as improvements are necessary to ensure their safety and comfort, and these modifications can be costly.

Independent living in a safe format is merely one consideration. According to a Merrill Lynch Finances in Retirement Survey last year, the average cost to retire has increased to $738,400. The average balance in a 401(k) account is $102,900, according to Fidelity.

How much does auto-enrollment and early withdrawals impact retirement moving trends? Participating employees are more likely to reduce their potential auto-enrollment gains by as much as 42 percent, withdrawing an average of $850 more than employees who voluntarily enroll. This could lead to massive losses in retirement savings down the road.

When taking overall auto-enrollment savings into consideration, however, those who participated saved, on average, $1,200 more in eight years (in 2004 dollars) compared to employees hired only a year earlier but who were required to sign up on their own, according to the Alight report. Additionally, companies offering auto-enrollment are largely converting more employees, who would not typically contribute, into retirement savers.

Younger workers should start seeking employment with companies that offer 401(k) auto-enrollment now, and should refrain from pocketing low balances should they transfer jobs or withdrawing until they have reached retirement age. Additionally, in order to truly benefit from auto-enrollment and build up savings, Congress may have to impose added restrictions on low-balance payouts in response to job transitions, as well as make it easier for auto-enrolled contributors to transfer funds without the hassle of complex paperwork.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

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Challenged by a Down Payment? The Easiest Markets to Save For

By Susanne Dwyer

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One of the biggest challenges for first-time homebuyers is saving.

Coming up with a down payment is a hurdle for the majority of millennials, shows study after study—but, there are areas where the average earnings are enough to save sufficiently, according to an analysis recently released by RealEstate.com. The easiest market? Chicago, where the average first-timer can save 20 percent for a starter in just over three years.

1. Chicago, Ill.
Annual Household Income for Millennials: $50,500
Annual Millennial Savings: $10,821
Median Starter Value: $177,300
Down Payment (20%): $35,460
Savings Timeline: 3 years, 3 months

2. Dallas-Fort Worth, Texas
Annual Household Income for Millennials: $50,600
Annual Millennial Savings: $10,843
Median Starter Value: $185,400
Down Payment (20%): $37,080
Savings Timeline: 3 years, 5 months

3. Detroit, Mich.
Annual Household Income for Millennials: $43,100
Annual Millennial Savings: $5,388
Median Starter Value: $96,700
Down Payment (20%): $19,340
Savings Timeline: 3 years, 7 months

4. Baltimore, Md.
Annual Household Income for Millennials: $54,300
Annual Millennial Savings: $11,636
Median Starter Value: $214,000
Down Payment (20%): $42,800
Savings Timeline: 3 years, 8 months

5. Indianapolis, Ind.
Annual Household Income for Millennials: $39,400
Annual Millennial Savings: $6,567
Median Starter Value: $122,500
Down Payment (20%): $24,500
Savings Timeline: 3 years, 9 months

6. Pittsburgh, Pa.
Annual Household Income for Millennials: $41,700
Annual Millennial Savings: $5,212
Median Starter Value: $103,600
Down Payment (20%): $20,720
Savings Timeline: 4 years

7. Cleveland, Ohio
Annual Household Income for Millennials: $42,900
Annual Millennial Savings: $5,362
Median Starter Value: $109,600
Down Payment (20%): $21,920
Savings Timeline: 4 years, 1 month

8. St. Louis, Mo.
Annual Household Income for Millennials: $43,200
Annual Millennial Savings: $5,400
Median Starter Value: $119,900
Down Payment (20%): $23,980
Savings Timeline: 4 years, 5 months

9. Austin, Texas
Annual Household Income for Millennials: $50,700
Annual Millennial Savings: $10,864
Median Starter Value: $249,700
Down Payment (20%): $49,940
Savings Timeline: 4 years, 7 months

10. Washington, D.C.
Annual Household Income for Millennials: $67,900
Annual Millennial Savings: $14,550
Median Starter Value: $343,000
Down Payment (20%): $68,600
Savings Timeline: 4 years, 9 months

The analysis factored in first-time homebuyers’ household income (median), plus the cost of a down payment on a median starter. (Twenty percent is ideal, but not a requirement.)

“Contrary to popular belief, millennials want to buy homes, but high home prices, low inventory and stagnant wage growth are some of the many factors that may be driving would-be buyers into delaying homeownership,” says Justin LaJoie, general manager of RealEstate.com. “However, in certain U.S. housing markets first-time buyers can find some relief; they just need to know where to look.”

RealEstate.com is part of Zillow Group.

For more information, please visit RealEstate.com.

Suzanne De Vita is RISMedia’s online news editor. Email her your real estate news ideas at sdevita@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

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Disruptor Roundup: Divvy Takes on Rent-to-Own

By Susanne Dwyer

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Editor’s Note: The Disruptor Roundup analyzes companies implementing unconventional models.

Divvy
This tech-powered, rent-to-own platform was launched at the end of 2017, and provides consumers with the ability to transition from renting to homeownership with a three-year program that amasses a down payment within its required monthly payments. Currently available in Atlanta, Cleveland and Memphis, Divvy is looking to expand to other markets.

Divvy purchases homes on behalf of consumers. There are, however, restrictions. Divvy cannot purchase and lease condos, non-bank approved short sales, auction properties, manufactured or mobile homes, undeveloped lots, homes in pre- or mid-construction or properties with problematic conditions that require extensive maintenance.

How does the program work? Applicants must first be preapproved and undergo a thorough underwriting process that requires photo identification, tax returns, recent bank statements and a credit check. This process typically takes between 24 hours and three business days, according to the Divvy website.

In addition to rent, Divvy also charges “equity credits,” which make up about 25 percent of the monthly payment and are used as down payment funds at the end of the leasing period. Additionally, 5 percent of the monthly payments go toward maintenance funds, to be used for any home repairs, which applicants must address themselves, as Divvy does not function as a traditional landlord.

The qualifications? Candidates must:

  1. Have been employed for the last 12 months
  2. Have an average monthly income of at least $2,300 per month
  3. Be able to comfortably afford a Divvy monthly payment (rent, equity credits, maintenance funds)
  4. Have a credit score of at least 550
  5. Have had any bankruptcies discharged at least 12 months prior to applying
  6. Have at least $1,300 saved for a down payment

The cons? First, Divvy customers may only use partnered agents, which highly limits buyers. How are these agents chosen? Divvy does not provide guidelines on its website, and was not available for comment.

Additionally, while this incentivizes homeownership for prospective buyers who have trouble building up a down payment, the leasing program is more of a forced savings program in which they risk losing out on funds if they break the lease and choose not to purchase the home. Divvy will only refund 50 percent of the total dollars of equity credit if the three-year lease is broken, and, at closing, deducts 1.5 percent of the applicant’s equity credits in order to cover its own selling costs.

Buyers might also be wary of Divvy’s static home value projection, which estimates how much the property will be worth in three years. It can be difficult to ascertain whether buyers are truly leasing to buy at fair market value three years prior to the actual time of purchase.

As Divvy does not provide mortgage services, buyers will still need to be approved for a loan at the end of the lease period, which brings up additional questions regarding the home’s value and appraisal conditions. Divvy can report on-time rental payments to the credit bureaus during the three-year lease in order to help applicants who wish to increase their credit score before purchasing, improving their chances of being able to qualify for a home loan.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
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Breaking Down the Hottest Patio Trends This Summer

By Susanne Dwyer

Summer patio season is ramping up. The experts at Infratec say that outdoor design trends for 2018 are all about incorporating affordable luxury into your own backyard by turning your patio into a peaceful, lush oasis through low-maintenance water fixtures, a color refresh and vintage materials.

The company sees many homeowners gravitating toward easy-maintenance exterior garden designs that enhance physical and mental wellbeing with spa-inspired touches, like meditation benches, fountains, reflecting pools, rock waterfalls and zen gardens.

According to Infratec, low-maintenance water features can add visual interest and soothing sounds to a yard—even in drought-prone climates—because they actually require little water (and recycle the water they do use).

Kate Simmons at Decoist.com says cabana stripes can be found in this year’s collections, and this trend shows no sign of fading. She says that linen, teak and rope are a few of the materials designers are incorporating into exterior furnishings and accessories to give this year’s easy-breezy trend pizazz.

When it comes to outdoor style this year, Simmons says pink is the accent color of choice, especially if a hint of blush is introduced into your furniture vignettes.

Meanwhile, at FamilyHandyman.com, trend watchers are seeing patio furniture that mixes materials, such as metal and wood, instead of a single material, such as wicker.

If you have a covered deck or patio, the site says you can bring it up-to-date by adding a ceiling fan. If you haven’t installed a ceiling fan before, rest easy—you can do it yourself in less than a day, and you’ll be comfortable even on the hottest summer days.

FamilyHandyman.com also says that the days of small, bistro-style dining tables on the deck and patio are over, and that large-scale square and rectangular tables are hot.

As far as accessories are concerned, think bright and bold when it comes to fabrics for your patio furniture cushions in 2018. Go with yellows, reds and pinks that will pop against all that natural greenery, and your guests will be raving about your impeccable sense of style all summer long.

For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

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Is Amazon Embarking on Home Insurance?

By Susanne Dwyer

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July 16 is Prime Day, and this year’s deals feature double discounts on Alexa-enabled smart home devices, including Echo, Fire TV and Fire tablets, Amazon reports. As the marketplace giant gets more and more involved in the lives of homeowners, could consumers start to see offshoots into other home-related services?

Amazon-run home insurance could be the company’s next endeavor, according to The Information, a technology website. Although Amazon has not yet provided concrete evidence for insurance plans, it would make sense due to the company’s most recent partnerships. From plans to create a line of robots to be used as homeowners’ personal assistants, to the latest collaboration with Lennar showrooms to promote its line of smart home products, Amazon is already deeply entrenched in the lives of homeowners.

The alleged reason for this possible next phase in Amazon’s services? The company’s various tech products could help monitor for dangers such as burglaries and fires, resulting in more affordable premiums, reports The Information. Amazon has already made moves into the healthcare industry to build out its medical supply business, so an insurance division isn’t outside the realm of possibility.

If Amazon did form its own insurance division, what would it look like? In order to beat out the competition, there may have to be a sizable price difference in premiums and an added catch for consumer convenience. A traditional financial model may not be feasible for a company that needs to juggle its Prime audience base, along with several other technological innovations, to stay relevant.

However, this could be more of a partnership than a foray into its own segment of home insurance. Since regulations vary by state, it would be difficult for Amazon to establish a national presence under its own umbrella without investing an abundance of time and money to maintain a legally intricate service. Another concern? Amazon would need to have the necessary funds available to create a pool of reserves for any upfront claims payments.

In order to cut costs, Amazon may be able to sell consumer information it gathers from its smart home devices—in December alone, the installed base of Amazon Echo devices in the U.S. amounted to 31 million units, according to Statista. This way, the company would be able to barter data in order to profit from already-established insurance institutions and further negotiate consumer discounts, similar to the way insurance companies currently provide credits to homeowners who have security systems installed at their properties.

According to Statista, the global smart home market will reach an estimated value of over $53 billion in the U.S. by 2022. Will future homes be run by Amazon? It’s starting to look that way.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
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Blockchain Lending: Reduced Fraud or Increased Risk?

By Susanne Dwyer

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Traditional lenders are transforming, adopting cutting-edge technology to stand apart from competitors and introduce an added level of security to financing. From AI-run algorithms to smart contracts, obtaining a mortgage could soon be a vastly different process than buyers experienced just 10 years ago. Industry disruptors, however, are looking to shift from the traditional model completely, threatening to take over the role typically performed by bank intermediaries, which buyers are accustomed to.

One new business claims it is the first company to apply blockchain to mortgages. Block66 is a blockchain-based marketplace for lenders, from which they can access vetted buyers looking to finance their mortgage. Co-founded in 2017 by CEO Joe Markham, CPO James Tuckett and COO Kamil Mieczakowski, the platform is set to launch in early 2019. The most significant benefit the company is advertising? Reduced risk for mortgage fraud.

“We created Block66 to offer new opportunities for borrowers and end the time-consuming and paper-driven processes in the mortgage industry,” said Joe Markham, founder and CEO of Block66, in a statement. “Our platform will make it easier for everyone to find what they need so mortgages can be approved and funded faster. By storing the history of each transaction on the blockchain, we will provide a valuable audit trail for lenders, which will help mitigate mortgage fraud.”

Additionally, Block66 states the addition of blockchain to a real estate transaction will reduce costs for buyers, as they will not have to be vetted via banks; instead, applicants’ information will be made public to any lenders using the platform. Block66’s loans, which will become asset-backed tokens, will reportedly play a role in leveling the lending playing field, allowing all types of investors (not only big banks) to participate, and giving way to increased applications for buyers who would not be considered worthwhile by larger banks.

“The idea behind mortgage tokenization is to bring in smaller lenders,” said Markham. “They are often reluctant to tie themselves to longer repayment plans but are more willing to lend capital to customers who aren’t always favored by traditional banking institutions, even though they are creditworthy.”

The risk? While bank intermediaries are often more costly—resulting from the manpower needed to not only vet candidates for creditworthiness, but to ensure financials are in order and paperwork is completely submitted—they often add another layer of security to the transaction that the new technology cannot be trusted to replicate at this time. Often, these banks become reliable vendors for real estate agents who have partnered with them, providing buyers with vetted mortgage lenders who not only get clients to the closing table, but also prioritize customer service and become community resources.

There are other challenges, as well. Smart contracts are not yet recognized by courts on a global level, an obstacle for Block66 when transacting across borders. Additionally, while applicant and property information is publicly displayed on the blockchain, the technology is still new, adding uncertainty into the equation for smaller banks who do not typically risk lending long-term loans. Applicants may still find ways to bypass this technology-based security and fraudulently represent the assets or financial history necessary to buy.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

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From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
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Smart Homes: The Way of the Future or a Risk to Homeowners?

By Susanne Dwyer

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Glitches of early iterations aside, AI-based technology has come a long way, and has an increasingly active presence in the lives of homeowners who are looking for convenience and savings in a pushed-for-time era. From adaptive thermostats that automatically gauge energy usage and alter temperatures for optimal savings, to smart home speakers that use sophisticated artificial intelligence to provide services and information in real-time, a smart homeowner can now cross off a variety of menial tasks from their daily to-do list without doing more than speaking a phrase out loud or clicking a button on their mobile device.

What is the true cost of this convenience? Some gadget adopters are reporting invasion of privacy, security risks, and more. For those who have not yet invested in smart home technology, these factors are largely holding them back; in fact, it is the second-biggest reason for hesitation for 17 percent of non-users, behind price (42 percent), according to a recently released report by PricewaterhouseCoopers (PwC), “Smart Home, Seamless Life: Unlocking a Culture of Convenience.” In addition, 56 percent of surveyed individuals stated they would choose encryption to protect their data when creating their own smart home.

What are these misuses of technology that could lead to privacy or security risks? These are a few of the reported instances thus far:

  1. Gadgets May Be Susceptible to Hacking
    Last August, Wired published a story about a British security researcher for MWR Labs, Mark Barnes, who was able to install malware on an Amazon Echo device, turning it into a surveillance device that silently streamed audio to his own server. While newer models cannot be jailbroken this way, Amazon has not released any software to fix the issue with older units.

For the typical owner, this may not seem like a significant violation; however, this could lead to another type of home theft in which fraudsters break into homes looking to steal identifying information via smart home gadgets, leaving little to no evidence of their break-in behind. While Barnes installed code for the specific purpose of audio streaming, he clarified that the installation of malware could serve other uses, such as stealing access to a homeowner’s Amazon account, installing ransomware or attacking parts of the network.

  1. Smart Technology Could Lead to Location-Based Tracking
    Earlier this month, security investigator Brian Krebs reported on a privacy vulnerability for both Google Home and Chromecast—found by Craig Young, a researcher with security firm Tripwire—that leaks accurate location information about its users.

According to Young, attackers can use these Google devices to send a link (which could be anything from a tweet to an advertisement) to the connected user; if the link is clicked and the page left opened for about a minute, the attacker is able to obtain a location.

“The difference between this and a basic IP geolocation is the level of precision,” Young said in the article. “For example, if I geo-locate my IP address right now, I get a location that is roughly two miles from my current location at work. For my home internet connection, the IP geo-location is only accurate to about three miles. With my attack demo, however, I’ve been consistently getting locations within about 10 meters [32 feet] of the device.”

Google initially told Young they would not be fixing the problem; however, after going to the press about the issue, Young reports that Google will be releasing an update in mid-July to address the privacy leak for both devices.

  1. Glitches Could Lead to Invasion of Privacy
    According to local news stations in Portland, Ore., a resident (reportedly named Danielle) received a disturbing phone call from one of her husband’s employers telling her to shut off her smart home devices. After using Amazon devices throughout her home to control temperature, lighting and security, Danielle was made aware that a private conversation was accidentally recorded by Amazon’s artificial intelligence system, Alexa, and was sent to a number on the family’s contact list.

Amazon has since reported that the Echo speaker picked up words in Danielle’s background conversations that it interpreted as “wake words” for recording and sending audio to a contact; however, an article published by website The Information last July states that Amazon was considering obtaining recorded conversations and sending transcripts to developers so they can build more responsive software, making it unclear if these devices automatically record audio without waiting for “wake words.”

These Vulnerabilities Could Impact Real Estate
Smart homes are increasing across the country. According to Statista, a statistics website, the estimated value of the North American smart home market will be $27 billion by 2021.

Of course, the vulnerabilities that have cropped up for some users could have an impact on the selling process. For example, some sellers have already begun using their security systems as a way to listen in on prospective buyers or watch them as they visit the listed home, regardless of whether local laws prohibit these recording practices.

Additionally, if homeowners have devices such as Google Home or Amazon Echo, but do not have security cameras, how can they be sure that visiting buyers are not accessing sensitive information through these speakers? While agents always play a role in adding a measure of security by being present during showings, fraudulent activity that is internet-based only, such as obtaining online data through links, will be difficult to identify.

Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at ldominguez@rismedia.com. For the latest real estate news and trends, bookmark RISMedia.com.

The post Smart Homes: The Way of the Future or a Risk to Homeowners? appeared first on RISMedia.

From: Consumer News and Advice

    

Remember I am just a phone call away to help with all of your real estate needs!

Nancy Wey
281-455-2893