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Technology Helps Solidify Revenue in Volatile Market
By Lesley Boyd
 Builders who modify their upgrade options to include state-of-the-art home technology will draw the attention of buyers, create home buying opportunities and increase their bottom lines, according to a recent survey by the Consumer Electronics Association (CEA).
In the sixth annual “State of the Builder Technology Market Study,” a survey of builders and supplement to a NAHB Annual Builder Practices Survey tracking key technology trends in new housing, nine in 10 builders said that adding home technologies either increased or maintained their revenues.
“Builders are starting to recognize the importance of home technologies to their bottom lines,” said Chris Ely, CEA senior research analyst.
Builders who are adopting new technology and offering options to potential buyers are able to stay afloat as well as solidify home sales and increase revenue in the process, the survey found. Fully 35% of the builder respondents indicated that they feel they must offer structured wiring and security systems in order to survive and thrive in this market.
“Our research shows that more builders are paying attention to market opportunities and consumer demand,” says Steve Koenig, CEA director of industry analysis. “Builders must offer home technology options to compete in the market.”
A Builder-Consumer Gap
During a housing downturn, it is important for builders and consumers to be on the same page so builders can close deals and solidify customer satisfaction. However, according to the study, there seems to be a gap between builders and consumers regarding home technology.
“Consumers are not always aware of the technology options available,” said Ely. Home buyers "are more concerned with other tangible new home elements such as cabinets, countertops and flooring.”
Consequently, builders need to better educate their consumers about what technology options are available and how they can enhance their lifestyles.
“Builders need to change their sales spiel to link upgrades such as granite countertops with home technology options like lighting control,” said Koenig. “They need to ask questions about their buyer's lifestyle and family so they suggest the right kinds of home technology upgrades.”
Technology Trends: Home Theaters, Multi-Room Audio/Video and Energy Management
The technology market survey identified three distinct trends in home technology that builders said their buyers wanted —home theater, multi-room audio/video (MRAV) and energy management.
Seventy-three percent of the builders surveyed said they offered a home theater option upgrade to their buyers. From simply pre-wiring a room and adding speakers to creating a fully-dedicated media room, the survey indicated that consumers appreciated the upgrade and that it did not result in huge cost increases.
MRAV technology was offered by 57% of the respondents, according to the survey. Builders indicated that this technology boosted their profit potential when offered to potential buyers.
“The percentage of homes that have MRAV technology installed has grown since 2002,” said Ely, noting that the survey results indicate that a greater number of home owners are interested in listening to music, watching movies and accessing the Internet throughout the house.
The third technology trend, energy management, is buttressed in large part by the rising cost of energy and the growing trend toward “green living.”
“It is easy to start a conversation with a new home buyer about energy management, as it is a concern shared by most buyers,” said Koenig. “A builder can use a discussion about programmable thermostats as a launching pad to discuss other energy-saving options such as lighting control, smart HVAC and home automation.”
No matter where the conversation starts about home technology upgrades, it is important for the builder to launch into the widest array of options available to enhance each particular consumer’s lifestyle and increase the potential for additional revenue.
Technology Helps Builders’ Bottom Line
Almost nine in 10 builders in the study say home technologies are important for marketing, according to Ely. “In fact, the number of builders who say home technologies are ‘not at all important’ is 11% ― the lowest since we first conducted the survey.”
“Simply stated, installing home technologies helps a builder's bottom line,” added Koenig. “Not asking questions and not promoting home technologies is tantamount to leaving money on the table.”
Lesley Boyd is a freelance writer based in Orlando who writes about home technology. For more information, e-mail Boyd.
 Information About Home Technology Available From HTA
The Home Technology Alliance (HTA) is a partnership between NAHB and the Custom Electronic Design Installation Association (CEDIA) that was formed to position the housing industry to effectively meet the growing home buyer demand for home technology and provide maximum return on investment in the new home building and remodeling process.
For more information, visit www.nahb.org/HTA.
 CEDIA: A Source for Experienced ESCs
The Custom Electronic Design Installation Association (CEDIA) is a founding sponsor in the Home Technology Alliance and an international trade association of companies that specialize in designing and installing electronic systems for the home.
CEDIA members are established and insured businesses with bona fide qualifications and experience in this field. CEDIA serves as a source for Electronic Systems Contractors (ESCs).
For more information on CEDIA, visit the association’s Web site at www.cedia.org. To find an ESC, click here.
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