The housing market may be struggling, but consumer electronics in homes is surging.
That's the crux of the results from a new study from the Consumer Electronics Association (CEA) and the National Association of Home Builders Research Center.
The news is even better for integrators, as the 5th Annual State of the Builder Technology Market Study shows that builders are now employing custom installers more than ever.
Fully, 62 percent of builder report hiring a custom integrator, compared to only 34 percent of builders who using these specialists three years ago. Builders still employ security installers (65 percent) and electrical contractors (63 percent) in large numbers too.
Meanwhile, CE pros have the highest satisfaction rate among homebuilders (89 percent). Security installers have an 83 percent satisfaction level, followed by electricians (75 percent), major retailers (70 percent) and utility companies (54 percent).
Other key results show:
- More builders than ever are offering home technology, led by an amazing 87 percent offering structured wiring -- a technology category that barely even existed a decade ago.
- The penetration rates for various technologies in new homes held steady and slightly increased in 2006, defying the idea that builders would cut back on tech amenities as home sales slide.
- Marketing home technologies is more important than ever before. In fact, 84 percent of builders report that marketing home technology is important.
- On the flip side, most builders are not actively marketing home technology. No builders are proactively marketing technology in the homes they build and only 8 percent say they provide information to homebuyers on request.
- Four out of every 10 builders say home technologies are having a positive impact on their revenues. That is up from three in 10 in 2005 and two in 10 in 2004.
- Price, reputation and experience working with other builders are the leading factors used to select a home technology contractor.
- The CEA's National TechHome Rating System continues to be a great unknown. Five years after its introduction, 65 percent of builders are completely unaware of the program.
- Finally, the primary reason reported by builders who do not install home technology continues to be "not much consumer demand." However, even those builders who have not jumped on to the technology bandwagon yet are seeing cracks in their armor, as the percentage who report lack of demand decreased across the board in every technology category. Lack of profit, the inability to find an installer and lack of education are the other primary reasons why builders don't install home tech.
New-Home Technology Penetration (percent of new homes)
Technology 2003 2004 2005 2006
Structured Wiring 42% 61% 49% 53%
Monitored Security18% 28% 29% 32%
Multi-Room Audio 9% 12% 15% 16%
Home Theater 9% 8% 11% 12%
Lighting Control 1% 2% 6% 8%
Home Automation 0 2% 6% 6%
Energy Mgmt. 1% 5% 11% 11%
Source: NAHB Research Center, CEA

Technology penetration rates in newly constructed homes continues to rise across the board. It is interesting to note the jump in new homes with "green-building-related technologies" like lighting control, home automation and energy management. Multiroom audio and home theater are increasingly hot commodities among homebuyers.
Pricing of Home Technology (from Builder to Consumer)
2004 2005 2006
Home Automation $6,900 $6,700 $8,900
Home Theater $4,800 $6,200 $7,700
Lighting Control $5,500 $6,100 $6,900
Structured Wiring $1,000 $2,600 $3,800
Multiroom Audio $1,300 $2,500 $2,800
Energy Mgmt. $1,800 $2,200 $2,400
Security $1,100 $1,400 $2,000
Source: CEA, NAHB Research Center

The average prices charged to homebuyers by builders for home technologies are steadily increasing. These technology options tend to have high margins for builders also. In addition to market demand, the rising cost of copper may be influencing these costs, as well as the increasing use of custom integrators, who tend to charge more and do more upselling to homebuyers than electricians and security installers.
Percent of Builders Offering Home Technology
Structured Wiring 87%
Monitored Security 81%
Multiroom Audio 74%
Home Theater 73%
Lighting Control 57%
Home Automation 51%
Energy Mgmt. 52%
Source: CEA, NAHB Research Center

More builders than ever are offering home technology, led by an amazing 87 percent offering structured wiring…a technology category that barely even existed a decade ago. Indeed, more than half of all builders are offering every home technology category surveyed. Five years ago, fewer than one in three builders offered lighting control, home automation or energy management systems.