For years, we have been waiting for the smart home concept to take hold. Industry players ranging from security companies and broadband providers to wireless carriers have been trying to break into this elusive category, which still hasn’t quite hit the mainstream. Long considered a value-add for builders, home technology might be on its way back to the list of upgrades in some markets.
Key smart home components, such as smart appliances and even the smart TV, have been trying to penetrate the market and make our homes more intelligent, but the underlying infrastructure necessary to connect all of the home systems—entertainment, appliances, security, and lighting—has yet to gain any traction with consumers.
A recent study from CEA (Consumer Electronics Assn.), www.ce.org, indicates this trend may be changing. Released earlier this month, CEA’s 11th Annual State of the Builder Technology Market Study found the overall growth of the home technology market has remained relatively stable throughout the last two years. The study also found technology installations in new homes has reached or exceeded 2008 levels—an indication this market has not only recovered but may be well on its way to becoming the industry norm.
According to the study, which surveys more 1,000 U.S. builders, structured wiring remains the most common installed technology (70%), followed by monitored security(44%), and home theater prewire systems (27%). Chris Ely, senior manager for industry analysis at CEA, says these percentages suggest installed technologies are shifting from luxuries to standard options. In fact, the surveyed builders reported installed technologies have become a valuable marketing tool in new homes, with close to half (49%) stating that they find it much more or somewhat more important to market these technologies today.
Not surprisingly, the survey also revealed almost all (92%) new homes are equipped with broadband cable, up 36% from 10 years ago. Perhaps the more telling aspect of the report is that this greater broadband adoption is impacting the way consumers design their homes. According to the report, one in four newly built homes in 2012 had a dedicated home theater room as opposed to one in 10 homes just two years ago.
Installed technologies like structured wiring and monitored security are also popping up in remodeling projects. However, small and custom builders tend to be the ones installing the systems. CEA’s survey revealed that small builders (42%) saw a greater portion of their revenue stemming from remodeling efforts in comparison to luxury homebuilders and local builders. According to Ely, these projects are giving small and custom builders a competitive advantage over national builders.
While the CEA survey doesn’t reveal clear-cut growth in the smart home market, the findings do suggest a positive shift in the market. Builders are starting to see revenue coming from home technology installations, and consumers are starting to value it enough to ask for it and, as shown in the increase in dedicated home theatres and remodels, design their homes around it.
This perceived value has no doubt been the missing link in the smart home market. As more builders and homeowners continue to value installed home technologies, they could be quite literally laying the foundation for the next generation of homes.