High-Tech Homes

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Many people are unaware of different technology that can be incorporated in new homes
Many people are unaware of different technology that can be incorporated in new homes

RISMEDIA, October 17, 2006?(MCT)?As construction of homes slows in a cooling market, builders seeking a competitive edge should take a harder look at technology, the Consumer Electronics Association concluded in a special report.

What the association found is that many people are unaware of different technology that can be incorporated in new homes, but they would take a closer look at buying if a home had amenities such as a home theater, security system or energy-saving technology.

The builders and the consumer electronics industry have a responsibility to educate people about what is available and how much it costs.

The biggest reason recent home buyers said they didn’t buy a new technology in their home? The builder didn’t offer it.

“If the builder doesn’t offer it, it’s not as likely the consumer’s going to buy it,” said Joe Bates, CEA director of market research.

There are several reasons a builder might not offer technology upgrades to a home.

“A lot of builders try to talk them (buyers) out of it,? said Michael Fricke, owner of M1 Systems in Santa Clarita. ?They don’t want to deal with it.”

Fricke often installs wiring for security, cables for home networks and other upgrades after a home is built and sold. When he comes in during construction to complete such work, it’s usually for a custom home.

He sees it as a mistake for builders to not include new technology. When the price of the technology is spread out over a 30-year mortgage, it becomes much more affordable for a homeowner than if it is added later, he said.

Getting people to adopt the latest technology takes time, said Stephen Melman, director of economic services for the National Association of Home Builders.

Tankless water heaters offer a more efficient way of providing hot water to a home, but people have to understand what they are and how they work before they start demanding to have them installed, Melman said.

Ten years ago, vinyl windows were the new thing in homes and made a lot of sense, but it took people years before they were accepted, he said. Because of this hesitancy, he agrees that education is important.

“It’s a two-way street,” Melman said. “We do surveys of potential home buyers to see what they want. We also need to educate buyers on what is available.”

A good chunk of people answering the CEA survey said they had no need for the technology, with the percentage varying based on what was offered.

About a quarter of people said they had no need for structured wiring, about half said they had no need for automated lighting controls or monitored security.

Technology upgrades often fall to the bottom of a home buyer’s list. Other factors, such as quality of construction material, cost, location and size of the home, are more important.

That’s what Suzie Bornhauser with Aviara Real Estate in Westlake Village has seen with her clients.

“Most people who don’t have an unlimited amount of money are obviously looking for a good buy,” Bornhauser said.

They want a home in a good neighborhood with good schools for their children that will appreciate in value. The first thing her buyers look at is the kitchen, seeking granite countertops, stainless steel stoves and refrigerators. Then they look at floors and doors.

Those are the important things to them. If a house comes wired for home theater or surround sound, that’s just a bonus, she said.

Bates said technology might be more important to future buyers. There also is a measure of “informed regret” ? when people who just bought a home are asked what they wish had been included. Energy management, home theater or multi-room audio and lighting controls ranked high on that list.

Bornhauser deals mostly with people shopping for middle-range to lower-priced homes.

“I don’t think people in that price range are looking for power shades,” Bornhauser said.

The more a person can spend, the more likely they want new technology in their homes, Bornhauser said.

New technology often shows up in upscale homes first and then makes its way into more affordable homes, Melman said. That’s part of the adoption process.

Some things, such as wiring for cable TV and Internet, have become common in most new homes. But even accepted technology has to be re-evaluated constantly.

New wireless technology might change how builders wire homes, Melman said.

It will be audiophiles and electronics buffs that drive technology into homes, said Arnie Burke, owner of AV Innovations in Ventura. For people who can afford it, there are a lot of exciting things available, he said.

“For the average person, a big step is getting a flat-screen (television) and maybe a home theater,” Burke said. “Beyond that, the price of equipment tends to keep people away from getting in too over their heads.”

Burke does some work with people building new homes, but most people are looking for an aftermarket or retrofit job.

Burke said many people still shy away from the sticker price of an upgrade.

“Most people’s expectations, as in most things, is that it won’t be as expensive as it turns out,” Burke said.

One challenge for home builders is the disconnect between what people expect to pay and what it actually costs to add upgrades, such as a home theater.

Builders report that having a home theater installed during construction can cost on average $6,200, but buyers say they expect it to cost an average of $3,602. Bates said the discrepancy is probably based on what people generally know the different components cost, such as the flat-screen television and stereo. Close to half of the people surveyed said they had no need for a home theater or multi-room audio, about a fourth said cost was also a factor.

Many people end up installing home theaters after construction. The same is true for multi-room audio. About half of those surveyed installed home theaters themselves or had friends do it.

Bates said that is a missed opportunity for builders.

Fricke said one problem is that builders have a contractor install the desired technology for a certain price and then bill the home buyer a much higher price, making it cost prohibitive for someone wanting the latest technology.

That’s something that will have to change, Fricke said.

The market could be driving change on just what home builders put in homes.

“It’s a very competitive market,” Melman said. “They’re (builders are) going to work like the dickens to make their product more appealing than the next guy’s.”

There also is the drive of a lot of new products on the market, and people demanding more in their homes as they travel less, attend fewer movies and want the comfort of having more in their homes, Fricke said.

“They’re slowly being forced into it,” Fricke said. “They’re going to start to have to offer a lot of these things to sell those homes.”

Copyright 2006, Ventura County Star, California

Distributed by McClatchy-Tribune Business News.

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