CEDIA Market Size & Scope Survey: Housing Market Dynamics Driving CI Direction
The results of CEDIA's annual U.S. Market Size & Scope of the Residential Technology System industry canvass, taken in mid-June, were unveiled at CEDIA Expo 2019. The CEDIA survey showed that current housing market dynamics point to increased opportunity for connected-technology integrators – especially among affordable-home buyers, according to a summary given by Grant Farnsworth of The Farnsworth Group, which did the research.
However, multiple housing market dynamics are at play – and are making an impact. For one thing, he said, people aren’t selling their homes as frequently, which is affecting market inventory. And while existing-home pricing is on the rise, the building industry is feeling the impact of tariffs on finished goods – the elements and tools needed to make new homes – putting a damper on new affordable-home construction.
In the new-construction sector, Farnsworth reported to the audience, “the luxury [home] market is saturated... The opportunity is in affordable homes… There’s still opportunity out there, but the growth will not be on the luxury side.” He noted that integrators would do well to take note of the mindset of home buyers – namely, Millennials – who are just moving up from entry-level homes and who are becoming more familiar with do-it-yourself (DIY)-friendly home technology products that are flooding the market – and that are, no doubt, whetting their appetites for deeper home control solutions.
Dovetailing with these overarching findings are the following discoveries unearthed in the course of the research:
- Dedicated home theater and media room installations are down, in parallel with lower numbers of luxury home purchases, as are the average numbers of these types of projects executed per year.
- Opportunities abound in the outdoor entertainment category.
- While audio systems project numbers were reported to be flat overall, average ticket size per install was up.
- Average gross revenues in residential installations were reported to be somewhat flat, but there is potential for growth in the commercial installation category.
- Lighting control remains a great revenue-generator for installers.
- Integrators are adding more of certain project types to their workloads; these include security and monitoring systems, which present “a huge opportunity” – and installers are getting better about tapping into revenue opportunities in security monitoring. These categories – including having a “healthy home,” and monitoring of homes for their health and wellness aspects, are of particular interest to younger homeowners with children.
Among the top business challenges confronting technology integrators, finding qualified employees and training them was cited by around one in five respondents. Following that as the top pain point were challenges posed by the attraction of the market ubiquity of DIY products (cited by 18 percent) followed by consumers not appreciating the value in professional products and installation (16 percent). Just 10 percent noted integration complications/reliability of products as a top challenge, attesting to the overall robustness of the technology integration industry’s offerings and services.