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2007 Full of Opportunities for Home Technology Custom Installers

Feb 19, 2007 8:00 AM

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With housing starts expected to be roughly 200,000 in 2007, the builder market is ripe for attractive incentives as builders try to move existing inventory and establish points of differentiation from the competition.

That could be a boon for the custom electronics industry, which has had varied success in penetrating the conservative builder community. According to a report released by the Consumer Electronics Association at the recent International Builders’ Show in Orlando, home builders are generally receptive to the sales opportunities offered by home technologies, but prefer to leave the sales and marketing to third-party contractors.

In fact, two-thirds of builders used custom installers for home technology in 2006, up sharply from a third in 2004. That puts custom specialists on a par with security installers (65 percent) and electrical contractors (63 percent).

According to the report, “The 5th Annual State of the Builder Technology Market Study,” 84 percent of builders say home technologies are important in marketing new homes, a number basically unchanged over 2005. Despite that view, however, builders aren’t proactively marketing technology to their customers, and very few even provide information on options at customers’ requests.

That leaves a wealth of opportunity for electronics integrators to mine the market, especially as more homeowners and architects demand technology features. Although profit potential was the primary reason home builders offered home technologies in 2005, builders’ chief motivator in 2006 for offering technology options was a response to homeowner and architect requests. The report says home builders are increasingly working with custom installers, retailers, security installers, and service providers to collaborate on offerings and home technology installations.

Structured wiring remains the most prevalent technology in new home construction, according to builders surveyed, who said they installed structured wiring networks in 53 percent of new homes. Growth in structured wiring has plateaued, however, along with multi-room audio and monitored security systems. In 2006, those builders sampled said they installed monitored security systems in 32 percent of homes, up from 29 percent in 2005. Despite the modest number of homes built with multi-room audio (16 percent), that number inched up just a percentage point over 2005, CEA says.

Among technologies offered by home builders, lighting control, home automation, and energy management are seeing the greatest growth potential, according to the study. Fifty-seven percent of builders offered automated lighting last year, up from 45 percent in 2005. More than half of builders surveyed offered home automation, compared with 42 percent in 2005. Energy management offerings increased from 46 percent to 52 percent.

Those builders who do not offer home technologies cited lack of consumer demand as the primary reason, with the biggest falloff occurring in structured wiring due largely to the rise of wireless home networking. Builders also report a lack of profit potential as the second reason for not offering tech options. The third factor—that builders can’t find a product or installer for structured wiring, multi-room audio, and lighting controls—points to a significant opportunity for custom installers to develop relationships with builders that lead to consistent new home construction business.

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