Given the recent slowdown in sales of new and existing homes, it is clear that production builders are going to have to begin marketing and selling their homes, as opposed to just building them as fast as they can to keep up with demand. They're looking for points of difference that separate their homes from those of their competition. In this market, that competition is not limited to new homes.
One way to achieve differentiation is to build technologically advanced homes. As Paul Powers, who heads up contractor sales for Harbor Audio Video in Camden, Maine, puts it, “The savvy real estate offices here have begun to feature high-tech built-ins. It's a successful tag line. If it's a high-tech home, it's worth more.”
Tony Leone, vice president of sales for the New Home Entertainment Solutions unit of Sony Electronics, reports that in the past few months, he has seen a significant increase in inquiries from builders regarding home entertainment and automation products. “I'm hearing the word differentiation. I'm starting to hear it from everyone,” says Leone. “They're saying to themselves, ‘You know what, rather than reduce the price of my house, I'm going to put some added value in there.' ”
The question, however, is how does the builder sell that high-tech concept? Many, if not most, prospective home buyers develop a blank stare when told of the benefits of structured wiring, distributed audio, and automated home control. But when they see it in action, the proverbial light bulb goes on.
One way to illustrate the benefits of a high-tech home without breaking the bank is to install flat-panel video screens in strategic places around the home. Nothing shows the functional utility of a home audiovisual and information technology network better than a big high-definition TV screen hanging on a wall in a family or great room. The good news is that the prices of plasma and LCD TVs are falling rapidly. They also are relatively easy to install, providing the network is in place, and with the addition of a cable or satellite box, a DVD player, and perhaps a subwoofer, they can replicate or exceed the movie-theater experience. That can provide salespeople with a potent marketing tool.
The prudent builder will at this point ask the essential question: How much does this cost? The answer is: Probably a lot less than you think. Best Buy this past holiday season featured a 50-inch high-definition plasma monitor from Maxent for less than $2,500. It is just a monitor, meaning that it does not include a tuner and must be paired with a cable or satellite box. But it nonetheless broke a critical price barrier. A subwoofer that connects to the plasma itself and a DVD player are a matter of hundreds of dollars. Installation is relatively simple, although the wiring network must be in place and a wall plate must be located behind the location of the plasma screen.
Leone says Sony is offering sizable rebates to builders who include complete rack-based A/V systems as standard or options in their new homes. These will handle both video and distributed audio and will add to the cost of a simple flat-panel installation, but, combined, the systems could go a long way toward illustrating the value of a connected home.
In the end, the package could end up costing the builder far less than competing on price.