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Home Builders' Profits Driven by Installed Smart Home Technology

tulsa home builders profits driven by installed smart home technology BlueSpeed

According to the Consumer Technology Association’s (CTA) 14th Annual State of the Builder Technology Market Study, one-third of U.S. home builders (36 percent) claim to have experienced revenue increases due to home technology installations. Since 2009, the number of builders reporting revenue increases rose more than 10 percentage points, indicating that installed home technology may have helped the home builder industry bounce back from the recession.

"As more consumers are living digital lives, home technology has helped builders' bottom line," said Chris Ely, senior manager, industry analysis, CTA. "And as the economy improves, builders are deepening and diversifying their home tech offerings and finding more revenue opportunities as a result. To expand their gains, builders should continue to market the benefits of smart home technology to generate buyer interest and increase revenue potential."

The study also found that almost 90 percent of new homes have a broadband connection and half of new construction—especially single family, luxury homes, and apartments/condos—have dedicated home offices. Small builders (61 percent) and custom builders (65 percent) are most likely to install dedicated home offices, as are builders in the Mid-Atlantic (60 percent) and Midwest (62 percent).

"Although consumers have limited dollars, the steady trend toward the majority of new homes having a dedicated home office suggests more Americans desire a dedicated workspace at home, potentially due to the rise in telecommuting," Ely added. "This is an area of opportunity where builders, suppliers and subcontractors can partner to promote smart home technologies to consumers before construction starts."

CTA also found that among new homes, structured wiring (48 percent), monitored security (29 percent), and home theater systems (17 percent) remain the most popular installed home technologies in new home construction. In addition, several key technologies saw gains in new home installations last year, including: stand-alone video surveillance system (nine percent), home automation (eight percent), and energy management systems (six percent).

Builders also reported that 64 percent of homeowners want to control their smart home remotely, either with a touchscreen or an app on a mobile device.

“Remote access and support is paramount to managing and maintaining a home’s smart technology,” said Ryan Sullivan, HBA member and owner of BlueSpeed AV. “Homeowners want the convenience of getting status updates on their home’s technology systems whether they just left the driveway or are half way across the world. When configured correctly, homeowners can use their smart devices to make changes such as adjusting shading and temperature, unlocking doors for cleaning staff, or setting the home to be ready to receive dinner guests. This remote functionality also makes servicing and monitoring the technology easier because check-ups can be done remotely by a professional integrator before the homeowner experiences any disruption of service.”

Builders also increasingly cite buyer/architect specifications and the need to remain competitive as top reasons to install home technologies. Profit potential is also a key factor.

“Today, a typical house uses 10 times more network traffic than most small businesses that just use Internet for sending emails and accessing online documents,” added Ryan. “Home’s with a robust network infrastructure that can handle the traffic of multiple streams of music, Netflix playing in the game room, Pandora cranked up in the kitchen, kids playing Xbox online, mom or dad working from home, and other areas, will be exponentially more in demand over other homes.”

The number one way builders find installation contractors is through referrals (83 percent) such as architects, real estate agents, and other builders.

“An experienced integrator will know how to implement smart home technology and automation in the most strategic and cost “effective” way,” added Ryan. “This is a win-win for both builder and future homeowners. Experienced technology integrators will know what type of cable to use and where to run it, and builders can completely avoid ripping into sheet rock later to make changes to accommodate smart home technology upgrades. The quality and comprehensive functionality of a smart home automation system will reflect well on the home builder’s craft, and will enhance their reputation in the community and amongst competition.”

*Sources:
Residential Systems Magazine: “CTA Home Builders Profits Driven By Installed Home Tech”
Consumer Technology Association: https://www.cta.tech
BlueSpeed AV Team