Rural Connectivity Effects on Real Estate Demand

Rural Connectivity Effects on Real Estate Demand

Fall is in the air! With this year rapidly winding down, I know most are looking forward to a fresh start in 2021. COVID-19 has affected all of us both personally and professionally at some level. Some industries and markets have been devastated while others have experienced expansion and growth.

So, how has it affected real estate? Fortunately, rural real estate markets have experienced increased interest and demand. The need to live in metro areas near offices has diminished.  For some, the need to return to an office may never again be a requirement. As a result, we are seeing increased interest in rural properties from buyers looking to escape the city. A place where the term “social distancing” need not apply.

Land sales continue to be strong – even showing signs of strengthening. Most rural land brokers are looking for more listings as their available properties dwindle. Closings are still occurring with virtual closing tables becoming more common. Land realtors have long been accustomed to sending property information digitally (maps, aerial photos, timber inventory).  Now, they are beginning to utilize more drone footage and detailed GIS data. Now, more than ever, buyers can effectively tour properties themselves when equipped with this information.

The pandemic motivates more people to consider moving away from the dense crowds of city life. This possibility of relocating to rural areas has renewed focus on rural broadband deficiencies. Ideally, employees can telecommute to work whether they live in downtown Atlanta or on a farm many miles away. However, the reality is many locations have little or no access to high-speed internet services.

Many regions in rural Georgia still lack adequate broadband access. Thus, residents of many rural communities do not have the opportunity to telecommute as a result of unreliable internet connections. In some cases, satellite internet services may provide some connectivity.  However, these connections rarely offer the speed needed for video conferencing or performing data-heavy tasks. While only a few satellite ISPs (Internet Service Providers) offer the broadband connection speeds, companies have the opportunity to update technology and improve connection speeds.

The Georgia Department of Community Affairs recently published a broadband availability map that shows more than half a million homes and businesses lack broadband access. Nearly 70% of these locations are in rural Georgia.  Residents and businesses owners in these areas must either travel to locations with high-speed internet access or use a slower, more unreliable internet service.

Given the size and scope of the problem, internet service providers are reluctant to invest in rural broadband infrastructure due to the significant amount of capital needed and limited profit margins.  These companies have also been reluctant to attach equipment to utility poles due to unpredictable and often excessive rental costs. This has effectively left thousands of rural customers without access to broadband internet service. For this reason, government subsidies are likely a necessity to move rural broadband from dream to reality.  In early August, Gov. Brian Kemp signed the Broadband Opportunity Act (House Bill 244) into Georgia law will help address some of these issues. As of January 1, 2021, this law will require utility companies to charge fair and reasonable utility pole attachment rates to broadband competitors.

The COVID-19 pandemic has exposed many rural systemic issues.  A highlight has been the lack of high-speed internet access for many students attending school virtually. Many small towns and rural communities use old telephone lines that provide internet connections no better than what was available in the 1990s. While this access may provide internet connectivity, these systems cannot handle the amount of data transfer necessary to work efficiently, effectively, and reliably. Updating these lines and adding signal boosters to existing infrastructures should help provide broadband connectivity to many more rural residents.

The current pandemic has spotlighted one of Georgia’s ongoing problems:  the quality of internet access is largely location dependent and often poor in rural areas. By improving broadband access, government can keep communities safer while keeping providing connectivity for residents to work remotely and safely. Improving these systems will open the door for more people move into rural areas.  This will breathe new life into communities that have been slowly declining during the information age.  If you are considering a relocation to a rural area, make sure you work with a realtor that understands these challenges and can help you identify properties that meet your connectivity needs.