While one should probably never use the words ”home” and “fire” in the same sentence, it’s well-recognized that the homebuilding segment has been on fire economically speaking throughout 2021 and 2022. Even with mortgage rates recently climbing above 5% and supply chain woes driving up the cost of materials, housing supply continues to be tight and demand remains strong.
Goldman Sachs expects US housing starts will increase 5% to 1.7 million units this year, positing “when housing markets are tight, like they are today, homebuilders are likely to keep building because they should have little fear that homes will sit vacant after completion.”
Interpret Vice President, Brad Russell, recently spoke on “Smart Home 3.0” at the Builder 100 event presented by Zonda Homes, an elite event hosted for the nation’s top 100 homebuilders. Russell found “homebuilders are increasingly all-in on smart home technology. Initial concerns about product obsolescence or unwanted warranty calls have given way to enthusiasm about how the technology creates operational savings during construction, enables self-touring, and adds the kind of value through connected living experiences that new homebuyers are demanding.”
At the event, Russell and Zonda principal Molly Carmichael discussed a variety of smart home trends that will drive the next decade of homebuilders’ development strategy. Recent Smart Home Matrix research finds consumers are thinking about smart home at every stage of the moving process: what they will leave behind, what they will bring with them, and what they expect in the new home. 41% of US adults want smart home technology in their next home, 35% are willing to pay a little extra for it, and 30% consider a move-in ready home to include smart home tech. Pre-installed technology not only offers buyers convenience but enables the cost of new tech to be rolled into the mortgage rather than as another out-of-pocket expense at a time when moving incurs so many other expenses.
Russell observes, “We have entered a new day where smart home tech is just as much a consideration in homebuying as many other traditional features. The market-by-market challenge for builders is determining how best to monetize their investment while remaining price competitive and maintaining margins.”