September 13, 2010
Boomers Scale Down But Still Want Integrated Home AV/AUTOMATION
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Millson Technologies’ Vancouver territory was largely insulated from the worst of the housing disaster of the last three years, especially the “ultra rich” for whom a condo like this one might be
a fourth or fifth residence.
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There are 78 million Baby Boomers in the U.S.–
over a quarter of the country’s total population–
and they’re looking for real estate bargains as they
downsize into post-child-rearing residences.
According to one study, 66 percent of real estate
professionals surveyed reported an increase in home
purchases from the “empty nester” demographic
over the last three years, with the desire to downsize
as the reason cited by them as the reason for the
move, according to more than half of those brokers.
Furthermore, almost half of those downsizing are
buying condos, the report states.
The Boomers are a tech-savvy cohort, and it may
be an inferential connection but 48 percent of home
automation dealers expect an increase in revenues
in 2010, according to a recent Irish market analysis,
a forecast based on GDP growth (2.8 percent) and
a rebound in luxury goods manufacturing.
David Frangioni, owner of Audio One/Frangioni
Systems in the Miami area, is very familiar with
the recent dynamics of the luxury condo market.
“This is a strong trend right now,” he says of
buyers flocking to South Florida to purchase highend
condominiums at bargain prices, and it has
stimulated AV and automation systems sales and
installations. However, that scenario comes with a
built-in paradox for the integrator. “The quality of
the condo unit has not changed from three years
ago,” Frangioni noted. “But what was a $2 million
condo three years ago is now a $1 million condo,
and the people who are buying them have the
expectations of a $2 million condo for the systems
but are only budgeting for a $1 million condo. It’s
become incredibly challenging to find solutions for
this kind of client. The budgets are literally half of
what’s needed.”
There are solutions. When confronted with this
budget vs. expectation situation, Frangioni sits with
the client to prioritize system features. If music isn’t
a huge issue then not all rooms get distributed audio;
if they can live without motorized blinds, those are
left out of the design, or only added to certain rooms.
Another tactic is to employ some of the more cost-effective systems solutions
that have come on the market in recent years, including new price-point-level
systems from traditional high-end manufacturers, like Crestron’s Prodigy, or
ZigBee-enabled solutions from companies like Control4. But, Frangioni says,
the integrator has to clearly communicate to the client the fact that these less
expensive solutions aren’t going to offer the same level of functionality or
performance as the top-of-the-line systems products can. That can be especially
hard when the newly purchased residence is a second home and the client has
a full-blown Creston or AMX system in their main residence.
Wireless solutions can offer some additional savings in terms of less cabling
to run, but Frangioni says that the savings are relatively small, particularly in
newer buildings that had more cabling installed during construction. More of
concern is how wireless in condo buildings can create crosstalk problems for
Wi-Fi, distributed AV, and control signals. “We have to be very careful with
wireless in condo buildings,” he cautions. “We go into them with a spectrum
analyzer and look for problems before we even start to work. Wireless can
be dicey in a private home where you have distance between you and your
neighbors; in a condo, it’s 10 times more likely to cause potential problems.”
The larger challenge, Frangioni says, is to resolve the clients’ budgets with
their expectations. “They’re thinking like $2-million clients, but they’re not
budgeting like them,” he said. “In this kind of market, it’s as much about
psychology as it is about technology.”
Up, Up, and Away
Richard Millson, president and CEO of Millson Technologies, says that the
real estate market in his Vancouver territory was largely insulated from the
worst of the housing disaster of the last three years, especially the “ultra rich”
for whom a condo there might be a fourth of fifth residence. But below those
strata he’s found a growing number of empty nesters selling single-family
residences (or several of them, at discounted prices) to buy up in terms of a
luxury condo residence. They are bringing with them a level of demand for
systems that would be expected in the single-family market but that is pushing
the envelope in condos, including both home theaters and separate media
rooms, and whole-house audio and video distribution.
“These are amenities that historically haven’t been offered in condos by
developers because of the costs involved,” said Millson, whose business model
has been to pre-sell his systems services as the builders pre-sell their units,
giving him the opportunity to get wire into the walls as part of the original
construction and making systems integration considerably more cost effective.
However, the slowdown in new-construction sales has pushed some of the
business toward retrofitting existing condos. That’s compelled Millson to look
more seriously at wireless systems solutions from companies like Control4 and
Sonos. “Those are useful for a number of applications, but if you need to do
HDMI over distance, you’re not going to be able to go wireless,” he said.
And when it comes to wired propositions, Millson says he encourages firsttime
condo dwellers to go for remote-controlled motorized window treatments.
“That’s the number-one thing I recommend, because if people have not lived 200 or 300 feet in the air before, they are going
to experience the sun in a whole new way,” he
explained, adding that he further recommends
blackout curtains be added to deal with the artificial
ambient light that surrounds urban communities.
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David Frangioni, owner of Audio One/Frangioni Systems in
the Miami area, is very familiar with the recent dynamics of
the luxury condo market. He says it has stimulated AV and
automation systems sales and installations like this project.
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Millson says a condo is usually better off being
thought of as an island within the larger building,
self sustaining and independent of the building’s
own systems except for entry access video and audio
from a front lobby. “We’ve found that keeping the
automation within the unit is the best,” he said.
“We’ve seen it tried and seen it fail; there might
be no one take over the management of a buildingwide
system, and the building management itself
isn’t qualified or doesn’t want to do it.” Millson
did, however, cite the 1,500 condo units that
comprise the recently constructed Olympic Village
in Vancouver as an example of a building-wide
integrated systems success. Those condos share
energy-saving and measuring systems.
Millson predicts that as Boomers age, they will
increasingly want to age in place, and the density
of condo living combined with the increasing
sophistication of systems that are now adding
healthcare monitoring and management could
combine to create a perfect opportunity for
electronic systems integrators.
“We predict that that’s going to be a growth field
for us,” Millson declared, referring to the convergence
of home automation and personal medical systems
services, which will be able to act similarly to personal
luxury services. Many of those
services have been overtaken by
smartphone apps like Yelp!, but
it may be a while before people
can have their blood sugar
monitored on an iPhone. “The
demographics are driving it
there,” Millson said.
Partnering with Developers
Robert Kaufman, CEO of Audio
Command Systems on New
York’s Long Island, sees a future
that has systems integrators
working more closely with
high-rise developers. Builders
have realized the allure that systems holds for upscaling, downsizing Boomers,
and he’s in discussions with one developer to put
an electronics amenities package into a sales demo
unit. The system, which will offer basic HVAC
and lighting control, will be upgradable, offering
the builder an upsell path and the integrator the
potential for a long-term client. The difference,
and one that acknowledges the current realities
of the real estate market, is that Kaufman would
be putting the systems into the demo unit on spec.
“The market’s coming back, especially in places like
New York, Florida, and L.A.,” he said, “But no one
wants to make the entire investment themselves.”
A New Frugality, Even in NYC
Michael Goodrich is president of Spectra AV in
Manhattan, which may be the least negatively
affected major real estate market in the country.
But while Manhattan is a destination for those still
looking to make their mark rather than downsize,
even there the new frugality that’s driving the
makeover of the condo market is evident.
Goodrich says that he has noticed only nuanced
changes in the level of integration work wanted by
his clients. “They still want music
in every room, but now it’s every
room that ‘makes sense’ to them.
They’re not putting speakers in
the back hallway where no one
goes,” he noted. “When they want
an eight-zone whole-house audio
system, they don’t want it to go
to 10 zones. Integrating the wine
cellar into the house automation
system, they’re not doing that
anymore. They want Apple TV
instead of Kaleidascape. The
customer has become more value
minded, even the very, very highend
customer. And that’s a good
thing. For everyone.”
Stop Banging on the Wall
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Room acoustics are
a specialty of John
Storyk, who now works
on more projects
like this one since
acquiring Miami’s
high-rise integration
specialist Maxicom.
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Acoustics remain an important
part of any home theater
installation but the topic takes
on additional challenges in
high-rise and condo buildings.
Room-within-a-room construction
used to isolate the
theater or media room from
the rest of the unit tends to be far too expensive to
implement in condos. John Storyk, an acoustician and principal in Walters-
Storyk Design Group, which last May formalized its home theater design
operations with the acquisition of Miami systems integration specialists
Maxicom, still believes that there is a broader market for acoustical treatment
solutions in condo environments.
The current wave of re-sales of bargain-priced properties will only fuel
that trend, he says. “People are coming to this market from homes where
they also had or have home theaters, and they’re not going to want to forego
them here,” Storyk stated. “It’s one of the reasons we’re in this market.”
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