Smart Homes and Smart Choices

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Smart Homes and Smart Choices

Smart Homes and Smart Choices
The market is speaking loud and clear: homebuyers want built-in technology when considering a new home. New homebuyers are familiar with the tech advances that are available, from whole-house Wi-Fi to sensor-based automation and they are willing to pay for what they want. And if they can’t get it, or they are buying an existing home without it, they are ready to install it themselves.

For example, according to research from Parks Associates, while 29% of builders install an interactive security system, which remains popular among builders, DIY (do-it-yourself) security systems are taking a larger share of the residential security market due to their growing popularity among security-conscious households. The firm’s DIY Home Security Tracker notes that among consumers who acquired their security system less than two years ago, 60% are self-installed, compared to only 7% of systems purchased more than six years ago.

Most households use professional security monitoring services, but owners are self-installing add-on smart home devices, so companies are expanding their product lines to meet consumer demand, including Abode, Array by Hampton, and Blue by ADT. The demand for an easy-to-install, integrated solution is becoming more prevalent in the Apple HomeKit ecosystem, with more DIY security systems and camera-related devices releasing product lines compatible with this ecosystem.

Meanwhile, most large-scale single-family homebuilders surveyed by Parks Associates offer smart home technology to increase the appeal of the house and not to add to the sales price. Smart lights, thermostats, door locks, and garage door openers are typically offered as standard, while smart appliances and smart water devices are offered as upgrades.

Some features are becoming common and their lack would be a sales concern if not killer in a buyer’s market. More than three-fourths of households with broadband would find it difficult to do without that service, and that translates into demanding it in a new home, a finding likely to increase following the widespread COVID-19 outbreak. About 60% of households would cancel their pay-TV subscription before canceling their broadband service.

The COVID-19 “stay at home” rules have people reassessing their priorities in regard to many home comforts. Those with OTT (over-the-top) subscriptions (internet streaming video on demand) are moving away from cable and satellite bundles and focusing on standalone internet service. The result is that providers are looking for more ways to include OTT video services in their offerings. Currently less than one-fifth of subscribers receive an OTT service bundled with their broadband package.

Consumers don’t readily understand how much broadband speed their home needs. For instance, the family’s age, rather than the number of connected devices, often determines the choice of broadband speed. Demand for 1+ Gbps (Gigabit) services is highest among younger consumers who use connected platforms and services heavily. However, as social distancing and self-isolating habits increase across the country, the demand for these higher-speed services could spike across all demographics and households.

With many people working at home, more stress is put on the broadband capacity. Service providers are trying to help customers better understand their throughput needs and upgrading their speed to match their increased consumption habits. The most popular sites and services, such as Netflix and Amazon Prime, will have to be throttled back during the current crisis to allow for the increased access from stay-at-home workers, shifting the demand cycle and locations.

Builders have long installed coax in the walls of new houses, but the newest buyers are asking for built-in whole house Wi-Fi to allow for the movement of devices around the home without interruption of service. This has become the strategy among large-scale single-family builders, to install a whole-home Wi-Fi network. Parks’ report, MDUs, Home Builders, and Smart Home Technology, shows 35% of surveyed builders provide the networking infrastructure to provide a “smart home-ready home” for customers.

The research finds a majority of the builders surveyed install Wi-Fi routers as a standard feature, while one-third install smart speakers with voice assistants as standard. Smart-home technology is highly popular with consumers, and connected products are rapidly replacing non-connected models as standard in the home, notes Parks.

All the interconnected devices found in the modern home require a control point to multiple their benefits. Amazon and Google are in position to expand further in the builder market as a control interface due to lowered price points and increased features. Their smart speakers give builders a means to integrate these smart technologies as standard in their new homes. Leading builders, such as Lennar, KB Homes, and Shea Homes, have all selected smart speakers as the user interface of choice.

The value propositions for builders and buyers alike can be evaluated and used to drive the developer’s business model, technology strategies, procurement and production processes, sales and marketing, and value-chain partnerships that will deliver smart-home solutions into new construction.

And communication technology isn’t the only way to make the new home more appealing. With the current pandemic firmly in mind, buyers in coming months will focus on health-related technologies as well. Although the coronavirus can’t be filtered by an HVAC (heating ventilating, air conditioning) system, people are thinking more about indoor air quality and how to create and maintain a healthy environment. High-tech electrostatic filtering systems will increase the value of a new home to buyers coming off the current pandemic.

In addition, the COVID-19’s high mortality rate among senior citizens is prompting consideration of PERS (personal emergency response systems). The “aging with independence” market, with particular focus on PERS, shows efforts from service providers and product manufacturers to expand their offerings and make them known to a wider audience. Builders can add this to their business model and seek partnerships with providers of sensor-based independent living solutions for seniors at home. New homes don’t have to aim at the senior market to offer these technologies as more younger families care for their older relatives now.

Although the traditional carry-along PERS devices remain the most popular, home sensor-based systems are gaining prominence among device manufacturers and service providers. PERS growth will depend on adoption of alternative devices and home sensor-based systems. Parks Associates reports that such alternative devices with emergency response capabilities—such as mobile phones, smart watches, smart speakers, and residential security systems—are competing with legacy PERS devices in the senior assistive technology market.

Some industry players are taking advantage of the widespread penetration of these devices and finding ways to integrate more robust emergency response technology into the devices already in consumers’ homes, while others are using these form factors to develop new PERS-specific solutions that appeal to a broader consumer base and encourage adoption.

As the COVID-19 emergency wanes, new homebuilders will want to remind buyers that these problems will always be with us in one form or another and, if they build in the technology that is finding demand now, their homes will be a better refuge in the future.

Was this article helpful? Yes -0 No -0162 Posted by: 👨 Charles M. Carone
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