By Erin Harrington · November 24, 2016
The housing downturn is turning around and the building market is making a marked recovery.
The timing is spot on for security dealers and integrators to take a page from a recent IBIS World Industry Research report projecting that the homebuilders industry is expected to grow at a rapid rate not seen since the housing bubble of the past decade.
For those who have always worked the sector successfully, the opportunities are now presenting even more positively. And for those who are just now eyeballing the possibilities, the time has never been better to cozy up to the homebuilding market.
It seems like a smart thing to do, especially in light of all the connected home technologies that homebuyers demand and builders need to deliver.
A 2015 real estate survey released by Coldwell Banker reveals that nearly 60% of 500+ Coldwell Banker sales associates say they’re seeing more smart home features in listing descriptions than they did two to five years ago, and one in three sales associates noted that properties with smart home features and technologies sell faster than homes without them.
The takeaway for security and home integration solutions providers is a chunk of business that builders have not always in the past put up for grabs.
Dennis Sage, who launched his Phoenix-based company, Dennis Sage Home Entertainment, in 1995, has enjoyed a long and impressively successful track record working with builders through the years.
He agrees builders are more welcoming toward connected home technology and open to working more closely with security dealers and systems integrators than in the past.
“Technology is moving at such a rapid pace that builders can’t keep up with it. We attribute this to the importance of the connected home and feel that this is being led by companies like Alarm.com and a few others that provide this ‘connected’ technology. More and more builders are including these features as a standard part of the home, therefore requiring the expertise of companies like ours,” he says.
This shift, Sage adds, is also being driven by younger buyers who are more aware of and insisting on these new technologies. The builders have no other choice than to offer the plethora of options.
Builders are more welcoming toward connected home technology and open to working more closely with security dealers and systems integrators than in the past.
George Harrison, principal of Harrison Home Systems in Golden, Colo., concurs. A thriving housing market, increased general awareness of the smart home, and a younger generation of buyers who simply expect technology to be implemented in their homes in a thoughtful manner are all part of the shift, he says.
This has led builders in his market to actively seek reputable companies with a proven track record as their go-to technology partner. Interestingly enough, it’s not just young homebuyers but also younger homebuilders who are turning the tides.
Craig DeRoche, director of operations for Intec Security Solutions in Scott, La., cites younger builders as believing it is more important to offer homes that are either turnkey when it comes to home technologies or at least wired for options.
“We have builders ask us all the time, ‘What do you guys think?’,” he says. “Obviously, we’d love to have them put in a $100K automation system in every house, but the reality is you don’t want to scare these guys away. Start small if you need to and grow the relationship with them,” he advises.
That is just a sampling of the insider insights and advice ahead to help dealers build their foundation of residential fortunes by building rock-solid homebuilder relationships.
Make Way for the Wow Factor
Before the downturn with the huge home construction boom, some builders were only really interested in structured wiring systems, but the demand for more technology is changing that somewhat.
“The mid-2000s and before saw very little in the way of what was ‘cool’ or gave anything in the way of what we call ‘The WOW factor,’” DeRoche adds. A shift began, he says, with the release of the iPhone in 2007 and other “smart” phones to where even the older generations started to embrace what was happening in the way of technology. “The Millennials, if you will, were like kids in a candy store when smartphones came out. This same age group are the ones buying starter homes now and they want control. Control over their security, cameras, t-stats, audio, lights, whatever they can get.”
John Galante, president of AE Ventures, Easton, Mass., a media and event producing company that services the home building market, notes that structured wiring was basically the only home technology builders were willing to include on a standard basis back then.
Today, many high-volume builders are working toward a standard home automation offering that incorporates feature sets such as those promoted and popularized by ADT Pulse, Xfinity and other mass marketers, he says.
Before the downturn, many builders were embracing structured wiring simply as a way of future-proofing, and for many custom builders this hasn’t changed in Harrison’s view. “Often, they’ll engage with us directly to provide a comprehensive prewire, then leave it squarely in the purview of the owner to make decisions about the final technology package. In the semi-custom and production markets, we’ve seen a clear shift,” he says.
“Even in the boom before the downturn, it was rare to see these builders include anything more than a structured wiring plan. With increased awareness of the connected home, many of these same builders now have gone to the next level, including preconfigured security and automation packages as part of their offerings.”
Interactive Vs. Fully Automated
A fully automated home is one that acts without direct input from the end user, reacting to things like changes in occupancy, climate or time of day/year.
Many of the DIY smart home products hitting the market today are simply “controllable,” whereas the more sophisticated systems a specialist can provide will lend themselves more toward true automation.
This is a clear benefit and selling point of the higher end systems, which spells good news for on-their-toes dealers and integrators.
Many of the DIY smart home products hitting the market today are simply “controllable,” whereas the more sophisticated systems a specialist can provide will lend themselves more toward true automation.
“The biggest difference between an interactive home and a fully automated home is the customization that can be achieved with incredibly robust products like Crestron, for instance,” Sage points out. Everything that is connected to a wire can be controlled and customized to the buyer’s demand. Connected homes are limited in that arena, he feels. “That gap is narrowing, however, and technology is closing that gap. The next few years are going to be exciting years in our business.”
DeRoche agrees. “An interactive home is the Alarm.com-type install, with a SONOS-type system, with say a Nest thermostat. With an interactive home, you still get that ‘cool’ feeling when showing off your apps to your friends. The fully automated home gives the wow factor, as I mentioned before. The driving force behind both revolves around one’s budget. Most younger homebuyers want the wow, but their bank account says, ‘Not now.’ The interactive home is a very good second to a fully automated home,” he notes.
Read on to see the integrators’ place in the process ->
Business Management · Home Automation · All Topics
