The Next Real Estate Revolution: 3D Printed Homes and Buildings

The Next Real Estate Revolution: 3D Printed    Homes and Buildings

There is a 3D Printing company called Icon printing out small 350 sq ft homes at $4,000 cost in just 24 hours. They already have a community of such small houses, the first in the US.

icon-tiny-house

Icon is also confident that they can print an average-sized house (2000 sq ft) for $20,000. To give some perspective, average markup on new house construction is roughly 30%. If Icon wanted to make the same margin, they could charge $27,000 for it. Same house for 10% of the average price. That is the power of 3D printing.

While it is a little early to assume similarity in all possible instances, technology has a way of making cost inputs cheaper and functionalities more extensive over time. The first question would be for how to make house 3D printing ubiquitous. It could not happen overnight, as people would not spend $15,000 to demolish their own house and then $20,000 to replace it, just to sell it at the same price.

For institutional developers, wide scale adoption could commence immediately, provided the functionality is there for the houses they want built. For individual land developers, it would be piecemeal replacements within traditionally built developments. This would be properties and empty land that the price would be much closer to zero than the price of the houses surrounding it.

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Laughing all the way to the bank

As there would be a big rush to cash in on this ridiculous margin, the forces of supply and demand would be especially dynamic in this case. As 3D printing of houses gets more popular, the price of both 3D printed and traditionally built houses will go down. However, price will not be the only deciding factor of demand.

As the functionality increases, more customization of design can take place. People want nice things when they can have it. There would essentially be a new kind of market, with the price's foundation being the 3D printing cost structure. When 3D printing becomes the norm and the price equilibrium gets closer to cost, you might see a mansion go for $150,000. And these price points can go down even further once AI is introduced to the process.


Interesting parallel

Consider the Model T as a case study. Manufactured motorized cars not much more expensive than a nice horse, and got cheaper as time went on. Then companies like Lincoln came into the picture offering more features and the concept of luxury. The same dynamic could happen for 3D printed homes.

As we get further and further into the future, more capabilities could mean the wholesale printing of entire housing developments in one, including roads and sidewalk. And larger buildings, where 3D printing ventures into commercial real estate. The price of real estate as a whole eventually gets cut off at the knees.

In this way, 3D printing will be a game changer in how much it takes of the average person's life and budget. Losing those jobs to AI won't be as bad, when it and 3D printing will also be lowering the cost of living to an even larger degree.