Construction Industry Trends
February 2006
The Evolution of the High-tech Home
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According to a new study of home builders released in January by the Consumer Electronics Association (CEA), 86 percent of builders believe home technologies are a significant differentiator in the marketing of their new homes. The CEA’s “2006 State of the Home Builders Study,” also demonstrates that technology in the home is continuing to play an increasing role in helping to boost revenue, with one-third of those surveyed saying that they believe home technology helped them increase revenue during the previous year. In the 2005 study, only one-forth said the same, while in 2004, only one in five recognized the impact of home technology.
“I think that for home builders, technology in the home is either a differentiator or something they owe to their customers, depending on what level of builder they are,” says Walt Zerbe, audio product manager with structured wiring company On-Q/Legrand and chair of CEA’s Multi-Room Audio Cabling Working Group. “They’re also seeing opportunities because they can make money with it. Technology is an upgrade like anything else, such as Corian countertops or hardwood floors.”
Many home builders are focusing on multi-room audio and home networking features as ways to differentiate themselves from their competitors. Multi-room audio in particular has taken center stage as an important option for buyers as more devices become available that meet consumers’ growing demand for home-based entertainment. Sales of audio equipment, including individual components, all-in-one stereo systems, home theater systems, and even radios, are up, with sales rising 11.6 percent in 2004, according to CEA.
“Homes are becoming generally more sophisticated with more types of electronics in them that aren’t necessarily just music, such as TV hook ups, home security devices, and baby monitors. They’re all different reasons for wanting to feed audio into different parts of the home,” says Dave Wilson, director of engineering and standards, CEA.
And as multi-room audio continues to grow in popularity, allowing more consumers to control audio throughout their homes from a central location, the idea of the “digital living room” has begun to evolve. Once relegated to the home office or kitchen, computers are poised to become the center of family life, acting as servers through which home owners can access gaming, movies, music, and the Internet from anywhere in the house. Accordingly, sales of home networking systems are expected to skyrocket—market research firm Parks Associates estimates that the number of homes worldwide with data networking equipment will grow from approximately 82 million in 2005 to more than 135 million in 2010.
Industry insiders believe the trend of technology in the home is only going to continue to grow in popularity as a key competitive differentiator. “Builders used to focus on technology like new foundation techniques or new floor joists. But the one thing they weren’t jumping on was technology in the home,” Zerbe points out.
Yet shifts in lifestyles and consumer demand have changed how builders look at technology. Rather than only focusing on the technology that goes into building a house—something that home buyers are rarely aware of—builders now are looking at ways in which to incorporate the features that make a house a home for todays buyers. “It just makes sense,” says Zerbe.
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