Technology and Home Building - Spring 2004 Cornerstones
Technology 's Impact on Housing Construction
and Consumer Choices
Take care of your customers, or someone else will
Technology has changed the way builders and REALTORS ® conduct their business. Home buyers are now demanding more choices in the existing homes they purchase and also in the new homes they want built. This has created an "A " list of homes REALTORS® show and market, and a change in the supply-and-demand dynamic that drives the in the supply-and-demand dynamic that drives the home-building industry.
Over the last year, we've seen housing starts hit record levels, and buyers are making it very clear cookie cutter version of homes that was acceptable just a few years ago is not on their shopping list anymore.
Consumers have access to a lot more tools to stay involved in selecting or building their new home, which is not going unnoticed. REALTORS® will spend 52 percent more on technology to do business than they have in each of the last three years, according to a recent survey by the National Association of REALTORS®. In fact, the average member will spend more on technology than for typical promotion and marketing expenses.
David Lereah, NAR chief economist, said their members' growth in technology use and dependence over the last seven years has been amazing. "In 1997,only 26 percent of our members had Internet access; now about half have their own Web page," he said. "With almost all real estate listings now available on the Internet - and seven out of 10 buyers using the Web as a tool to search for a home - we can 't even imagine a working business model today without this technology."
NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif., said the use of high-tech products has become so prevalent that
REALTORS® can no longer be as productive without them. Ninety-six percent of REALTORS® use e-mail (half conduct at least 25 percent of communication with clients through the medium), 95 percent use a mobile phone, 77 percent use a digital camera,41 percent have a DSL connection and 40 percent use Personal Digital Assistants (PDA). And though GPS technology is relatively new, 7 percent of REALTORS® use it.
"REALTORS'® appetite for technology is growing. On their wish list are wireless and PDA access to MLS listings, online floor plans, neighborhood crime and school stats, and electronic delivery and tracking of consumer disclosure statements," McDonald said.
"This technology changes the home buying process," said Coldwell Banker Managing Principal Chris Poole, of the Internet as a driving force in the evolution of the real estate process. Poole explained," The Internet allows people to self-search, to search for homes on their terms. It gives the consumer more control. Before they had to rely solely on a salesperson."
"If you can't provide the information consumers are looking for today, your competitor will," said Chris Smith, president of Web development company ICGN of Easton, Penn.
A recent relocation survey by Coldwell Banker reported that "thirty-six percent of people said that technology is an important factor when selecting a service provider." Indeed, as this testimonial from Christopher Perkins attests: "I tried (Coldwell Banker's) new Web site this morning. It will be so easy for me to check the status without worrying about playing phone tag! Glad to see them utilizing new technology to improve services."
The emergence of technology is also challenging the age-old REALTORS® mantra of "location, location, location." Respondents to a fall 2003 survey by the Partnership for the Advancement of Technology in Housing indicated that factors like low maintenance, high durability and energy-efficiency were at least as important as location-oriented choices like proximity to good schools, good neighborhoods, etc. In the survey, titled The Influence of Technologies on the Homebuyer 's Purchasing Decision, high-efficiency heating, air conditioning and windows were at the top of the wish list for buyers.
When your parents were buying homes decades ago, the 30-year fixed mortgage rate was the standard, and there wasn't much else out there. Now there are literally dozens of options for your rate. The same transformation has taken place in the home - construction arena. The choices an individual wants and desires are limitless, demanding a proactive approach and abundant flexibility from both those showing and selling homes and those building them.
The perceptions, motivations, reactions and decision-making processes of key industry players such as builders, remodelers, architects, trade contractors, home owners and do-it-yourselfers can no longer be ignored. The clamoring for choice is creating a din, and we will explore some of those voices in this issue.
Builders and Buyers Prefer Wired Houses
If you 're on the outside looking in, the technology of today's new homes may not be evident. But hidden inside the walls of these homes can be a network of wires and cables that gives these homes a 21st-century feel - and the technology that home buyers are asking for.
"One of the biggest requests new home buyers are inquiring about now is home automation," says project manager Josh Edwards of Roth Homes.
"It gives them the ability to control their light fixtures, appliances, thermostat, sprinkler systems, and monitor their security systems - all by entering a pre-programmed code on a keypad, or by logging on to a Web site from a computer with Internet access, anywhere in the world."
While some new technology focuses on consumer convenience, other designs will enhance a homes energy efficiency and reduce costs in the long run.'
"My homes come standard with cable and a control panel … so they 're already set up for in-house networking for printers, for example, and high-speed Internet access," says Chuck Miller, owner of Chuck Miller Construction.
Miller has won several awards, including Builder of the Year from the Building Contractors Association as well as the 2004 Energy Value Housing Award Builder of the Year from the National Association of Home Builders Research Center.
Beyond simply adding a central vacuum or security system, Miller sees technology's contribution as home-systems-wide.
"We use a systems approach to home building. We look at the home as a whole and how every component in the home can impact energy consumption," says Miller. It starts with the foundation design and moves up through the framing, insulation and even the window glass, he says.
Another technology that more people want but also is fairly transparent to the home buyer, is a HEPA filter for air quality.
"More consumers are asking us to install HEPA filters with heat recovery ventilators, which cycle the air," Miller says. The HEPA filters remove pollen, dust and other particulates while the air cyclers connect an outside fresh air supply to the furnace. When the furnace is operating, it introduces fresh air all the time. It also senses when the furnace hasn't kicked on and will circulate the air in the house after 50 minutes of no use. It provides for a balanced, comfortable home, and home owners don't get the stratification of temperature layers that other homes experience, he adds.
When it comes to communication between builder and buyer, e-mail technology has been a real bonus.
"I use e-mail for about 95 percent of the communication process during construction," says Edwards.
"I request to all my clients, once we have the contract process finalized and have begun construction, that they e-mail me with any questions or requests they might have for changes to the home. That way, I have a record of exactly what they requested and when. Not only is it efficient, it has cut down mistakes resulting from miscommunication by at least 75 percent."
And Miller concurs that if e-mail works for the customer, it works for him. "A lot of our clients are very e-mail-oriented, but we 're flexible with their needs. I do a lot of communication via e -mail. One of our clients now is a Micron employee stationed in Singapore. I've met with
him face to face only twice. We're putting together a house plan for him now. He'll be back in July, but we'll begin his house in June."
Need Milk? Ask Your Refrigerator
Gadgets Will Make Homes of the Future Run Smoother
Imagine a robotic lawn mower that saves you from hours of weekend chores. From the comfort of your favorite easy chair, you press a button on a remote control to open your
drapes and check the robot's progress. As you smile to yourself, a message plays over your audio system to let you know a visitor has arrived. Unsure whether it 's the groceries you ordered over the Internet or a solicitor, you glance at a monitor that displays video from security cameras around the outside of your home.
These gadgets, available on the market today, likely will become more commonplace in the homes of tomorrow.
Home-automation retailer Smarthome.com sells a sensor that detects
your car when you pull in the driveway, turns on outdoor lights and even causes a control console inside your house to buzz, letting your family know you have arrived. As your vehicle rolls into the garage, you are guided by lasers that help you park perfectly. Expensive? Not necessarily. The laser-guided parking system will set you back only $30.
Inside the home, you can dim and brighten lights and control the drapes and thermostats from one miniature controller. Or if you prefer, your lighting, appliances, the heating and cooling system and audio/visual equipment can all be controlled by a voice-recognition system. In your home office, you can use computer software to start a fresh pot of coffee with the click of a mouse. At the end of the evening, a single button push ensures that all lights and A/V equipment in your home have been turned off.
If you travel often, spending several hundred dollars on a Sensaphone may be worth the peace of mind. When you are away, you can call the phone to learn the temperature of your house or the status of any possible alarms. Install one of these phones at your cabin, and you can
turn on the air-conditioning and check the rain sensor to get an idea of what the weather might be like before heading out of town. In case abnormal conditions such as leaking water or a power failure occur, the phone automatically calls up to eight numbers to notify you, your family or neighbors.
But in the near future, your appliances may be able to take care of themselves. According to the National Association of Home Builders, homes of the future will be able to diagnose their own product and system failures prior to a break- down and alert service professionals to schedule timely preventative repairs. Many repairs to appliances and other computerized equipment will be performed remotely through the Internet.
Manufacturers envision appliances and systems that communicate with one another and can be managed centrally through the Web, according to REALTOR® Magazine. For example, embedded chips will allow your refrigerator to identify what items it is holding. On your way home, you could check what you need to buy from the grocery store by logging into your fridge.
We can only wonder what will be next.
Green Building Practices are Growing:
High-Performance Home Sprouts up in Northwest Boise
As green building continues to gain acceptance, homes of the future could be characterized as boosting the environment, the economy, and the health of their inhabitants.
Green building is a relatively new philosophy in design, construction and high-performance operation. The U.S. Green Building Council was established just 11 years ago.
Nine months ago, Ken Baker began work on his green, Energy Star-rated home in Northwest Boise. He designed and built his home using principles from the U.S. Green Building Council's voluntary LEED ® (Leadership in Energy and Environmental Design) rating system, widely accepted as the national standard for green buildings. Although LEED was written for commercial buildings, Baker was able to incorporate many of its methods in his residence.
One green building practice is to preserve a site 's natural features, such as trees. However, Baker 's lot was more of a brownfield when he purchased it. The property was home to a barn and corrals for 30 years and was overrun by weeds. Baker left the site's hilly topography undisturbed. The reduced excavation helped save on development costs. With his lot surrounded by sagebrush, he plans to allow the space to return to native desert by planting wildflowers and drought-tolerant grass.
In green building, materials are selected based on ability to recycle, durability and the amount of energy used to create them. Inside the home, the carpet is made from recycled pop bottles and other plastics. The outside of the home showcases the natural beauty of Idaho cedar. Baker selected local cedar because it used less "embodied energy," as it required little transportation.
Human health is also taken into account. There are no volatile inorganic compounds in the wall paint, helping to preserve indoor air quality.
Energy Efficiency
Building green involves conserving resources, and energy-efficiency plays a big part. Baker 's home is constructed 30 percent above the International Energy Conservation Code, and he estimates it will cost only $250 per year to heat, compared with three times that amount for a typical home that size.
The high-efficiency gas heating system and non-CFC cooling system feature programmable thermostats so that no energy is wasted when the family is away. However, Baker does not plan to use the air-conditioning much this summer. He believes the home can be cooled passively by opening specially placed clerestory windows in the evenings.
"On a hillside like this, you get cool air coming in, so I plan to flush the home at night," he says. "During the heat of the day, it will stay cool because the high insulation values, deep overhangs and reflective windows will keep the direct sun and heat out."
When he does turn on the heat or A/C, the air will be distributed through a commercial-quality, performance-tested duct system that was sized correctly to produce a very tight supply and return on air.
Thirty-inch overhangs protect the south-facing windows from direct sunlight in the afternoon. Where sunlight does strike the windows, only 38 percent of the ultraviolet and infrared rays will be allowed inside, keeping much of the unwanted heat outside, while allowing in 56 percent of available daylight. In addition to the natural lighting, Baker uses compact fluorescent light bulbs to save energy.
Baker also used two-by-six framing rather than two-by-fours to allow more insulation, which helps lower energy bills, reduce pollution related to energy production and save precious resources.
According to the National Association of Home Builders, by 2025, it is possible that houses will be net energy producers, rather than consumers as they are today. To help propel design and construction in that direction, incorporate some green ideas into your home.
Future advances
Here are some advances coming to the green homes of the future:
Thermal storage heaters will store heat at of f -peak times for use at peak times.
Photovoltaic roofing, fuel cells and microturbines will supply power to the
house and produce excess energy for sale to your local power company.
Vacuum insulation panels will be three times more heat absorbent than
products on the market today.
Windows will change from clear to opaque with the flick of a switch.
Homes will recycle water for multiple uses.
Industrialized housing and components will become more common.
Technical innovations will ensure construction using only necessary materials.
Source: National Association of Home Builders
The Cost of Housing:
How Has Technology Affected The Bottom Line?
We have discussed technology's impact on housing at length, but for many the whole issue can be boiled down to one concern: How does this affect the cost of housing?
Advocates of the new homebuilding process using cutting-edge techniques and technologies say that while initial costs may be higher (often not much), the costs to maintain those homes, and subsequent monthly utility bills, are substantially lower.
Chuck Miller, a builder in Hidden Springs, a secluded area near Boise, says he focuses on extreme energy-efficiency in his work. Miller is a member of Building America, part of the Energy Star program which focuses on the incorporation of new, efficient technology in the building process. He looks for techniques that are not only efficient but also can be incorporated at little or no cost increase.
"We are typically 30-40 percent more efficient than we have to be by building code," Miller said.
In the last few years, buyers have demanded more choices in building their homes, to customize rather than accept a "cookie-cutter" version. Builders are responding by allowing as much flexibility as a new house can stand. Of course, the buyer pays for these options, but the ability to individualize the home makes the exercise palatable.
Mark Levens, a sales manager for John Laing Homes in Irvine, Calif., says "it's all about choice." From "Tech Rooms," home gyms, optional dens, the conversion of tandem garage space into living/recreational quarters, etc., the ability to choose is at the top of any homebuyer's list. While people want to keep a close eye on their pocketbook, the American desire for freedom of individual choice more often trumps all.
Then there's the Building Innovation for Homeownership (BIH) program, an initiative from the National Partners in Homeownership, who say that cutting the cost of housing construction is an important strategy to make housing more affordable. They maintain that creative use of technology can help reduce the cost of housing construction and lower the cost of homeownership.
BIH recognizes award-winning housing projects from across the U.S. Winners use a wide variety of innovative techniques, from factory built components like manufactured housing and modular construction, to sustainable design and construction, innovative site design and designs that promote energy efficiency. Many projects combine technologies to reduce the housing units' cost.
One approach gives the home buyer the choice to customize his/her home. It may cost more at the time, but ultimately it seems to be a concession most are willing to make.
Brad and Kathy Calhoun, recent home buyers in Austin, Texas, agree. With custom features, Brad says "the cost was a little more painful than we though it would be, but it was worth it." Lisa and Sean Quinn, first-time home buyers in Mission Viejo, Calif., similarly made the decision to abandon their original budget and make some financial and lifestyle choices to shore up their spending in the short-term in order to get what they wanted.
For Scott and Heather Wright of Lincoln, Neb., the decision to custom-build came because they couldn't find what they wanted in an existing home.
"Either we didn't like the floor plan or the home needed $20,000 to $30,000 in redecorating" to get what they wanted, Scott said. Ultimately, they went for a custom-built home … and the price tag was $3,000 less than they had agreed to!
The other approach, endorsed by the BIH program, empowers the builder to make the decisions to produce a cost-effective home.
Whatever the home buyer's choice, individual flexibility, quality and savings are not mutually exclusive ideas in today's home-building market.
Note: Home buying stories contained within this article are excerpted from Homebuilding.com
