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7% Gain Seen In Custom Electronics Sold Through Builders In ’07: Parks

The value of electronic amenities sold by builders of new single-family homes will grow 7 percent in 2007 to account for $10.1 billion in hardware sales and installation charges, according to a Parks Associates study.

That follows an expected 5 percent to 6 percent gain in 2006 from 2005’s $8.9 billion despite the soft home-building market, Parks added.

“Growth in sales of electronics through builders is increasing as more builders offer electronic systems in more of their homes,” said Bill Ablondi, Parks home systems research director. Nonetheless, growth “has leveled off due to the slowdown in residential construction,” he said.

The figures don’t include the value of installations by custom installers hired directly by single-family home buyers. At the high end of the custom market, “that’s pretty common,” said Ablondi. “Builders will work with installers [in the high end of the market], but most often installers are not subcontractors to the builders.”

The figures also don’t include sales into multiple dwelling units (MDUs).

Parks also forecast that the wholesale value of electronic equipment sold through home builders into new single-family homes will hit $4.7 billion in 2007.

Structured-wiring installs represent the single largest custom revenue stream for builders, with 2007 revenues expected to hit $3.7 billion, (see chart). Home theater sales account for the second-largest revenue stream of $1.9 billion, followed by $1.5 billion in multiroom audio sales, $1.3 billion in security sales, $1.3 billion in sales of other equipment and $0.5 billion in home-control systems.

As for the wholesale-level value of the electronics sold through builders, Parks found that structured wiring and home theater components each accounted for $1.1 billion in factory-level sales, followed by $900 million in security-system gear, $800 million in multiroom audio gear, $600 million in other types of equipment and $100 million in home-control systems.