Millennial and Generation X homebuyers drive technology-integrated home market
For quite some time, the focus of residential real estate has been on the Millennial market. According to the National Association of Realtors’ 2019 Home Buyers and Sellers Generational Trends Report, Millennials are the highest share of homebuyers at 37 percent. With Millennials leading the way buying homes, residential builders are naturally dialing in on how to entice and attract this market. What they have unanimously unearthed as one of the primary driving desires of these home buyers is technology.
For a generation that has grown up with cell phones glued to their hands and all manner of “smart devices,” it’s hardly surprising that Millennials favor a technology-based infrastructure in a prospective home.
Millennials, however, aren’t the only demographic who prioritize technology-integration as part of the home-selecting process. Generation X homebuyers hold 24 percent share of the home-buying market (as the same National Association of Realtors report shows). Gen Xers, too, have ranked technology as a priority when choosing to purchase a home. This was further evidenced in a 2019 survey conducted by Cox Communications.
The survey comprised a mix of 604 Millennials and Gen Xers, all of whom intended to purchase a home within two years. Collectively, these individuals reported that technology compatibility would drive their decision to purchase a new-build home instead of a home for resale.
“Making sure homes are ready for wireless means that, when homeowners move in, they can simply activate the services with an app instead of waiting for installation,” says Guillermo Rivas, director of new build and major accounts for Cox Communications.
The survey revealed more specific insights into what type of home-tech expectations these buyers have. For example:
• 75% of Millennials and 77% of Gen Xers want high-speed fiber-to-the-home, broadband internet for remote work, online classes, and high-definition movie streaming.
• 56% of Millennials and 48% of Gen Xers seek wireless connectivity in common areas like outdoor gathering spaces, clubhouses, or near pools.
• 54% of Millennials and 51% of Gen Xers are looking for built-in, ready-to-use smart devices, such as thermostats, cameras, light switches, and refrigerators — all of which can be controlled through mobile apps.
Consequently, because of the tech wishlists of these buyers (as well as many current homeowners), homebuilders are challenged with how to bring them to fruition. Obviously, being able to integrate technology during the construction process is advantageous, as opposed to implementing technology down the road in an existing home.
“When these types of systems are built into the home, we’re helping [home buyers] overcome hurdles,” says Wendy Rosen, director of consumer insights for Cox Communications. “They don’t have to think about it. Builders can use this type of built-in amenity to drive appeal and command higher prices. It opens up new streams of buyers.”
How complicated is it for builders to provide the desired tech amenities? Rivas explains that it’s important for builders to wire homes with Category 6A or fiber cables to support wired and wireless technology. It’s also vital to make sure homes include a structured wiring panel with power in a central location (like a kitchen pantry).
And the call for more sophisticated technology will only continue.
“Smart home capabilities are already becoming central to residents’ daily lives,” says Jonathan Collins, Smart Home Research Director at ABI Research. “A swathe of new and emerging technologies will increasingly extend and strengthen that position through enabling a wide range of interconnected services within the home and beyond.” Alongside technological development, social, environmental, financial, and even political change will bring critical mass to speed smart home development and value.
ABI Research outlined smart home concepts that will drive transformational smart home investment and adoption, including:
• The Home as a Business: Where smart home capabilities enable and support new revenue generating services for residents to leverage.
• The Sentient Home: Where the smart home automatically adjusts in real-time to changes to suit a range of criteria, from individual presence and preferences to efficiency and weather changes.
“If these types of systems are built into the home, you can unlock potential by making them built-in and easily accessible,” explains Rosen. “By becoming more innovative, builders can reduce stress for homeowners, add convenience and provide services we know they want.”
Learn more about how to integrate technology into your next home-building project.