Ralph Corbo builds million-dollar homes in western Connecticut. A member of the NAHB and the Custom Electronics Design & Installation Association, The Corbo Group has long sold new homes with robust technology packages. But the market for its spec homes has virtually dried up, so late last year the company took an unprecedented step. It snapped up a foreclosed nine-lot subdivision in Waterbury, Conn., and made plans to build and sell $200,000 starter homes. The question became what home technology the company could offer, if any, and still hit its price point.
“The family that’s going to buy these homes is a couple of 28-year-olds, just got married, and they have laptops, iPods, and wide-screen TVs,” Corbo says. “Technology is part of who they are. So we decided we couldn’t give up our edge, our belief that technology was an important part of our homes.”
According to new research from the Consumer Electronics Association (CEA), 85 percent of builders agree with Corbo that offering technology is important to marketing new homes. CEA’s annual “State of the Builder Study,” done in conjunction with the NAHB Research Center and released last month, indicates builders who have in the past embraced options such as structured wiring, multiroom audio, and home theaters continue to do so when cutting back offerings seems logical.
“Even in this down housing market, builders remain largely committed to, and even recognize positive revenue gains from, home technologies,” says Steve Koenig, director of industry analysis for CEA.
The percentage offering systems to home buyers has increased since the study’s inception in 2003 and remained steady during the recent downturn. Structured wiring to support in-home networks continues to be the most popular item, with 87 percent of builders indicating they offered it to buyers. The other top systems include monitored security (77 percent), home theater (74 percent), central vacuum (74 percent), and multiroom audio (69 percent).
For the last four years, roughly half of builders said they actually installed structured wiring in new homes and 15 percent said they sold multiroom audio systems. The share of builders installing home theater technology is up dramatically in CEA’s study, from 10 percent in 2007 to 18 percent last year. Koenig says the jump reflects not only demand from buyers who plan to spend more time at home, but also price drops in displays and other systems.
For his nine-lot subdivision, Corbo says he’s been crunching the numbers in order to build homes pre-wired for 5:1 surround sound in the family room. “From there, we’ll try and upsell the screens, speakers, and receiver,” he says.
In his spec homes, the standard structured wiring package includes six plug-in points. But in his starter homes, there will be only two or three. At the high end, Corbo includes six zones of multiroom audio; in his starter homes, there will likely be two. But the important thing, according to Corbo, is that his company continues to sell homes with technology packages.
“We really believe in this,” he says. “We almost compromised, but when we looked at it all again, we were able to bring enough [technology] to the table to help us differentiate and turn a little profit.”