Journalism, when it sticks with actual facts and pursues truth that can enlighten its audience’s understanding and decision-making, works from a limited repertoire of plot lines. This one falls under the heading “not-a-matter-of-if, but-when,” and here, it applies to one of several inflection points destined to change not only how homes are built in the United States, but what buyers consider “must haves” in a new home today.
Just 36 months ago, many builders balked at pre-installing smart home systems in their new homes.
The risks seemed to outnumber the perceived value and benefits to buyers.
Among the reasons builders believed that going to the expense of equipping new homes with a smart technology package was a treacherous path to follow, the primary one usually came down to not wanting to derail the home-selling process with the potential distraction of a technical conversation with buyers they aren’t in a position to have. Here’s how the pushback took more specific form:
- All the noise and competitive confusion among major and minor players in the home technology landscape,
- The rapid obsolescence of some technologies and meteoric rise of others
- The relative technical complexity, incompatibility, non-intuitive user experience, and tendency to malfunction in everyday use
- The plain fact that people tend to like to choose for themselves which system, which device, which functionality, and which routine they want to operate their home with Internet of Things, so a pre-selected system might cost them sales
Like anything and everything at a time technology and data are barreling us into the future, all of that’s changing now. Exponentially fast.
A just-concluded, every-new-home partnership between No. 34-ranked, Houston-based all-Texas operator, McGuyer Homebuilders, Inc./MHI and Control4, to install a voice- and app-controlled door-locks, doorbell, thermostat, lighting, and garage door package may be a model builders large and small have to adopt, sooner than later. The Control4-MHI package includes an Amazon Echo Dot voice device, and a wireless access point extender for whole-house capability.
So now, the greater risk to home builders may be trying to bring their houses and communities to market without IoT-enabled everyday routines for security, room air comfort, lighting adjustments, and other functionality home buyers begin to expect rather than be particularly impressed by when they’re shopping for a new home.
“Our buyers are telling us they want affordably-priced, reliable, and easy-to update and expand smart technology so they can have exactly what they want in their homes,” Gary Tesch, president of MHI, which Tesch says is on pace to at least match full-year 2017 sales volume of 1,700 home deliveries, averaging about $430,000 in its four principle markets: Houston, Dallas, Austin, and San Antonio. “We need to do this to stay ahead to reach millennial buyers, and all of our buyers are dipping their toe in on smart home experiences. With Control4, we’ve been able to accomplish that, and hopefully take a leadership position among buyers who are demanding that we make this investment.”
MHI, whose recently activated branding focuses on a tagline, “Built Around You,” now will consider appending its messaging to reflect its initiative to equip every new home across its Plantation Homes, Coventry Homes, and Wilshire Homes lines with the Control4 baseline package. Tesch says, “We’re thinking about it as “Built Around You … Smarter.”
MHI is not, of course, the first big builder to embrace a smart home strategy across its portfolio. Pioneers, first on a community-wide basis and then on an enterprise-wide roll-out, include Brookfield, Lennar, Pulte, and KB Home. Lennar’s Everything’s Included approach to its smart home took wing in mid-2017, with its Wi-Fi Certified package featuring Amazon’s Echo at its core, an initiative that changed the game among production builders on at least two levels.
One, it gave prospective home buyers at various pricing levels–including the lower price tiers–a new sense of expectation that home builders would provide a smart home experience as a standard, rather than an optional upgrade for which they’d have to pay more.
Secondly, the Lennar initiative virtually compelled manufacturers, systems installers, and device makers into a collaborative process whose endgame would be an attainable, whole-house operating system residents could access through their smart phones or via Alexa voice recognition for security, door locks and rings, lighting, and room air comfort.
Even at a moment where new-home affordability, homeownership attainability, and monthly payment sensitivity are about the hottest buttons in the business, the “must-haves” it takes home builders to attract buyers keep escalating, and smart home technology packages are like piles of chips moving across the table. They’re no longer “extras.”
Clayton Homes’ recent enterprise-wide plan to install ecobee smart thermostats in all its new manufactured and stick-built homes further pivoted the smart technology playing field, out of the domain of a luxury, aspirational feature, to a household essential.
Control4, which counts Toll Brothers, Shea Homes, Arthur Rutenberg Homes, Mandalay Homes, Ball Homes, Holmes Homes, and others as big builder partners, has earned a reputation as a best-of-breed provider in the smart home hub and systems space, but has, until now, been seen as too expensive a player–aiming almost exclusively at the high-end and custom home market–to consider on an every-home basis for builders who play in the entry-level, first- and second-time move up space.
Earlier this year, Control4 introduced a less-costly CA-1 controller–which builds-in control for IP, ZigBee, and serial devices, plus an internal slot for Z-Wave Plus–designed, at a cost of $350, for attainability specific to becoming a high-volume builder standard.
“We started work with McGuyer Homes about 8 months ago, with the CA-1 controller as a basis for a program that would contribute to two value streams,” says Chris Ivie, Salt Lake City-based Control4 director for builder channel programs. “One part of the model is a plug-and-play integrated baseline of IoT functionality as a single-platform standard in every home. The other part of the business proposition is an elegant, seamless pathway in the design center process that allows each home buyer to personalize and customize their selections as part of the options and upgrades discussion, which allows the builder to make money on those expanded offerings.”
Ivie notes that MHI/McGuyer is the first builder to ante up for its new, more attainable platform as a core offering in all its new homes. “Every builder’s going to have to make smart home technology choices to put something in the home, and we’re investing heavily to be a big part of that opportunity.”
“Our buyers were telling us, ‘we really want something that ties all of this capability together in a reliable, affordable, expandable system,” says Tesch, who notes that the baseline system can expand to entertainment and A/V options seamlessly in the design center process. “We may be investing now at a level that can impact our margins for the moment, but longterm, the value and demand business case is getting stronger. We’re excited about this, and think it will make a splash.”
