Word of mouth among family and friends is currently the most important source of information about consumer electronics, Joe Bates, director of market research for CEA, told a PCBC audience in San Francisco last month. In a poll in late May of 998 recent or likely near-term home buyers, that was followed by professional installers, especially for follow-up information, and builders were a fairly distant third. As an initial source of information on home theaters, builders were cited by only 6% of the consumers surveyed, their lowest showing for a range of products, and by 14% for structured wiring, their highest.

“You need to educate consumers,” Bates said. “You need to be sure your home buyer is educated about these technologies. Consumers want to hear more about these from builders. People have been doing their own research, but don’t want to have to do it as much in the future.”

In the association’s 4th Annual State of the Builder Tech Market Study conducted online among 379 builders in November by the NAHB Research Center, Bates said there is evidence of a clear upward trend in the revenue implications of home tech. Thirty-three percent of the builders participating in the survey said that their revenue from home technology products had increased in 2005, up from 24% during the prior year.

In 2004, 83% of builders were offering structured wiring to their buyers and that dropped to 82% one year later, with half of them offering it as a standard feature and the other half as an option.

From 2004 to 2005, the survey found that the share of builders offering other electronic consumer items, all as options, had increased significantly: monitored security, rising from 74% to 80%; multi-room audio, from 65% to 74%; home theaters, from 58% to 69%; lighting controls, from 38% to 45%; home automation, from 38% to 42%; and energy management, from 36% to 46%.

With the exception of structured wiring, which was installed by 49% of the surveyed builders in 2005, down from 61% in 2004, because of advances in wireless technology, installation of these electronic products was on the increase last year, Bates said, and they were “growing very fast”: monitored security, up from 28% to 29%; multi-room audio, from 12% to 15%; home theater, from 8% to 11%; lighting controls, from 2% to 7%; home automation, from 2% to 6%; and energy management, from 5% to 11%.

The surveys showed that there were far higher percentages of consumers and especially short-term prospective buyers indicating interest in installing these products in their homes than there were builders actually installing them, indicating an opportunity to boost their sales, Bates said. For instance, 38% of recent home buyers and 61% of those planning to buy indicated that they were in the market for monitored security, but only 29% of the builders were offering that option. Many buyers, he said, have installed this product after the home was built.

Among recent home buyers, 32% of those polled, representing one-half million consumers when extrapolated for the actual number of new homes sold, said they wished they had purchased an energy management system; 23% said they wished their home had come with multi-room audio and a home theater and 22% said they wished they had lighting controls.

To a significant degree, home buyers said that they did not buy specific products because they were not offered by the builder. This was the leading reason they said they didn’t buy structured wiring (32%) and energy management (37%). It was cited second most often as the reason for not buying automated lighting controls (29%) and home automation (27%).

Bates advised home builders to find good installers in their area and view them as potential business partners.

Few builders install home tech products themselves, and the majority (67%) said they use an electrical contractor.

Only 43% of home theaters were installed during construction, and only 7% of the theaters were installed by builders.

For more information from CEA on home technology, click here.