Standard Time

SOME HOME BUILDERS ARE FINALLY starting to move past offering only structured wiring as a standard digital feature, with programs at national and local builders now including home theater and whole-house audio systems in the product mix.

For slightly under $10,000, Centex Corp.'s San Diego division offers Bose surround sound and a 42-inch LG plasma screen in the family room, as well as three rooms of Bose audio, as standard. And for about $10,500, 30-homes-a-year builder Harris Homes in Brentwood, Tenn., offers whole-house audio and a home theater as standard, including a 92-inch Draper screen, an InFocus projector, and an Elan whole-house audio system.

Why tie up so much money in technology?

“The technology gives us a competitive advantage against the builders we're selling directly against,” says Jay Kerr, president of Centex's San Diego division.

“Typically, [Mom] shops for the new home, but when Dad shows up and finds the plasma TV and home theater are standard, he doesn't want to look anywhere else,” says Kerr.

Pete Harris, president of Harris Homes, says he made the decision in early June to offer the home theater and audio as standard and says it puts him “way ahead” of his competitors in the Nashville market.

Greg Simmons, vice president of Eagle Sentry, a home-tech integrator in Las Vegas, says that while home builders aren't quite offering home theater and audio as standard, he does see them heading in that general direction.

“When standardization comes, the first thing you'll see is builders offering in-wall speakers as standard,” Simmons says. “Basically, lenders will be free to pack them into the mortgage because it's considered attached to the house,” Simmons explains.

Other products that builders will be able to more easily offer as standard because lenders will accept them as attached are Sony's WallStation audio/video products as well as its New Home Entertainment Solutions, an all-in-one audio/video system. The WallStation products run about $1,000 per room for audio and $2,000 per room for video; the all-in-one system runs from $10,000 to $25,000.

“We expect to see home builders offering Sony WallStation products as standard starting this fall,” says Neal Manowitz, senior manager of Sony's consumer systems and applications group.

The all-in-one systems, meanwhile, “are a great tool for builders to differentiate their homes,” adds Manowitz. “Most will be installed as upgrade options, but we're offering a program for builders and installers to allow it to be standard in the home.”

The program at Harris Homes is unusual in that it's being offered by a small builder in a market that's not particularly known as a technology hotbed. Harris, whose homes range from $495,000 to $700,000, seems to think he can outfox his big-builder competitors and steal some business from high-end custom builders as well. Whether more small builders will follow his lead is unclear, but it's certainly a clever way for a small independent builder to position himself against the large nationals and upscale custom builders.

What national builders are looking for—besides setting themselves apart from their competitors—is a way to offer home entertainment products from consumer electronics giants like Bose and Sony the same way they offer GE appliances, Pella windows, and Moen faucets as standard.

Sony just started shipping the WallStation products this month—marking the company's real push to standardize with builders—so the jury is still out on its program.

Bose's program with builders is another story altogether.

The company announced last summer that it was rolling out a standard offering with three builders: Centex's San Diego division; the Arizona division of Shea Homes; and Arvida, now St. Joe Towns & Resorts, whose parent firm, The St. Joe Co., is based in Jacksonville, Fla.

The idea was for Bose to sell directly to the builder, using a home-tech integrator only for installation. At least with Centex and Shea, attempts to sell directly failed.

“We don't have the warehousing facilities and people who can manage inventory, so we decided to go back to working with an integrator,” says Brad Olsen, vice president of operations for Shea's Arizona division.

“When we took a closer look, we decided we didn't need to offer the home buyer all that technology as standard,” Olsen explains. “Now, we'll just prewire for home theater, and distributed audio will be an upgrade,” he says, adding that prewiring a house for Bose products cost about $500, a price Shea decided was too high.

“Bose has great brand-name recognition and good products, but they're also expensive; you pay a lot for the marketing,” Olsen says.

Now, Shea Homes in Arizona is back to a more typical relationship with Phoenix-based integrator Dennis Sage Home Entertainment. Centex, meanwhile, stuck with a standard program based on Bose products but offers it to home buyers through integrator Advanced Electronic Solutions, based in El Cajon, Calif.

“At first, it was quite uncomfortable,” says Sean McDermott, president of Advanced Electronic Solutions, largely due to Bose's goal to sell directly. “But it's worked out to be a good situation,” he says, adding that packing all that technology in a home can work in San Diego because a two-bedroom condo there is $600,000 and a 2,500-square-foot home runs about $1 million.

“I think builders realized that new homes are getting so expensive, they needed to make their homes a little different from the next guy's,” says McDermott, who adds that he's in talks with just about all of his builders to roll out some form of a standard program.

Attempts to reach St. Joe for this article were unsuccessful. Bose would not comment on its relationships with builders.