What’s Up And What's Down In The Builder Market

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Fewer new-home builders offered home-automation, lighting-control and energy-management systems in 2004, but builders didn’t back away from multiroom audio and home theater systems, according to the third annual home-builder survey conducted by the Consumer Electronics Association (CEA) and the National Association of Home Builders (NAHB).

The percentage of builders offering structured wiring, however, kept on growing, the survey of 258 builders found.

The survey also the new-home penetration rate of multiroom audio held steady. Home theater penetration in new homes dipped slightly.

As in previous years, the latest survey was conducted early in this calendar year to poll builders about their previous-year business practices (see tables at right).

Between 2003 and 2004, the latest poll found, the percentage of home builders offering structured wiring rose to 83 percent, from 76 percent, while the percentage offering monitored home security dipped to 74 percent, from 75 percent. Sixty-five percent of builders offered multiroom audio in both years, and the percentage offering home theater rose to 58 percent, from 52 percent.

The percentage of builders offering lighting controls fell substantially from 48 percent, to 38 percent, and the percentage offering home-automation systems fell from 45 percent, to 38 percent.

Penetration: New-home installation rates of various technologies rose and fell largely in tandem with the percentage gains or drops in the number of builders offering each technology. The percentage of homes getting structured wiring rose to 61 percent in 2004, from 59 percent, and the number of homes getting security rose to 28 percent, from 26 percent. The percentage of homes getting a multiroom audio system held steady at 12 percent, but the number getting home theater fell to 8 percent, from 9 percent. Penetration rates of lighting and home automation each fell to 2 percent, from 7 percent.

Only a tiny minority of home builders, or 10 percent, thought it “very important” to offer home technology, while 69 percent thought it “somewhat important.” Most builders, or 76 percent, believe the impact of technology sales on their revenues stayed the same from the previous year, although 24 percent thought it increased. That’s up from the 19 percent who thought it boosted their revenues in 2003.

Pushed into it: For the most part, builders are offering these technologies not because they want to but because a buyer or architect specified it, or because competitors offer it (see table at left).

Percent of Builders Offering Select Technologies

Technology

2002

2003

2004

Structured Wiring

78.0%

76%

83%

Monitored Security

62.0%

75%

74%

Distributed Audio

56.8%

65%

65%

Home Theater

55.1%

52%

58%

Automated Lighting

30.8%

48%

38%

Home Automation

27.1%

45%

38%

Energy Management

31.3%

44%

36%

Technology Penetration Rates In New-Home Construction

Technology

2002

2003

2004

Structured Wiring

42.1%

59%

61%

Monitored Security

17.7%

26%

28%

Home Theater

9.2%

9%

8%

Distributed Audio

8.6%

12%

12%

Lighting Controls

1.0%

7%

2%

Energy Management

0.8%

8%

5%

Home Automation

0.4%

7%

2%

Why Install Home Techs?

Technology Type

Competition is Offering

Buyer/Architect Specified

Boosts Profit Potential

Sets Apart From Rivals

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