As New Homes Market Grows, So Does the Security and Automation Market

Manufacturers and dealers tap into more sales as the average new home jumps in value and size


Last summer, in July 2004, Genesis Cable, which provides a full variety of cabling and wiring to dealer/installers, was picked up by Honeywell's security division. Now, just over a year later, Honeywell is expanding the company's manufacturing operations with a new plant in Juarez, Mexico, and company execs think the company's growth is following a trend that's occurring not just in the security market, but in the residential construction market.

The company's product had previously been based in Pleasant Prairie, Wis., and current manufacturing operations will see a change in shift schedules that will allow increased production from existing plants. The facilities produce a variety of products, including fire and security cabling, coaxial cable, voice and data cables, as well a number of specialty cables for the home theater and home automation markets.

According to a statement from Honeywell, the ramping up of cabling production at Genesis follows strong demand that tracks along with continued positive numbers in housing starts. Housing starts have increased steadily over the last couple years. Despite many forecasters predicting what they call an inevitable decline -- a decline that was predicted to have already happened by now according to most experts -- the National Association of Homebuilders (NAHB) has continued to see an up-tick in housing starts, with September's starts outpacing every month so far except for January and February. The September numbers, at about 2.1 million units, have exceeded the highest months in any recent years except for 2005. (See NAHB housing starts data.)

Indeed the company's residential cabling production seems to follow a trend as housing sizes increase and more and more expensive homes are built. In September 2000, the average cost of a new home (a typical target area for high-end cabling) was sitting at $208,000. By September 2005, that number had jumped to more than $283,000. Indeed the size of homes is climbing as well, going from an average size of 1,400 feet just 30 years ago to an average of 2,200 square feet today according to NAHB data.

According to Susan Brady, the editor-in-chief of Security Dealer magazine, the growth of the home market coupled with a push toward safety are driving the security and cabling markets.

“Heightened concern for safety coupled with a robust new home sales market are two factors fueling the residential security market,” she explains. “Consumers are aware of the technology available and the capabilities these products offer. They are demanding dealers present comprehensive packaged solutions in residential system design. Often the cost of the home is in direct relation to the scope of the packaged solution specified.”