Last month, I attended NAHB’s midyear meeting in Miami and had the pleasure of sitting in on a presentation by Daniel Swift, president and CEO of Des Moines-based architecture group BSB Design.
Must-Have Boy Toy
Dallas/Fort Worth builders coax discretionary buyers by putting a home theater in almost every model home. Will the 'man cave' work for you?
Shop the pricey model homes in north Dallas suburbs, and likely you will get your fill of Tom Cruise. If the price tag is above $300,000, every model you enter probably has Top Gun blasting its afterburners in a second-floor home theater, set in a windowless bonus room over the attached garage.
|Dallas entry-level builder Choice Homes even offers a 400-square-foot home theater in its 2,598-square-foot Rosecliff model (shown at Providence in Denton County, Texas), priced at $159,950 with the bonus room.|
Bite your tongue if you're about to say this is a gimmick you've seen before, without any real sales value. Sales agents for a number of luxury production builders in the Dallas-Fort Worth area report that nine out of 10 buyers take the home theater option. They spend $14,000 to $18,000 for the pre-wired bonus room and perhaps twice that much to equip the space with a projection television, a wide screen mounted on the back wall, an amplifier, a receiver, surround-sound speakers and a subwoofer (or four) to knock your socks off.
The home theater morphed into an emotional must-have item in Dallas, the driver that makes the discretionary move-up sale happen. And its target is the male home buyer.
"It's a boy toy. I'd never do an inventory house without a home theater," Darling Homes agent Claudia Prince says from the sales office at Tanglewood Crossing in Stonebridge Ranch (McKinney, Texas). "Our pricing runs from the upper $300,000 range to over $700,000, and only one buyer in the last 20 didn't do a home theater. I'm closing them today, and they regret it. They could kick themselves now because they know it kills the resale value of the house if you don't have a theater."
Home theaters first hit Dallas about five years ago in parade homes priced above $1 million. The same sort of thing happened in most markets. But in Dallas, home theaters soon became a staple in the custom market. From there, they began a steady movement down the price ladder, first into the luxury production market and recently into midpriced homes at, or even below, $200,000.
Now, Choice Homes, which operates in the entry and first move-up markets from $90,000 to $170,000, finds buyers eager to purchase bonus rooms and turn them into home theaters at that price range. "Almost 90% of our buyers, in houses that offer a media room option, take it in some form," marketing director Kris Densing reports. "A media room for a young family usually comprises a flex space with a big-screen TV, a sound system and some sofas. It gets a lot of use by the kids playing video games. And it has a window, just in case the next owner wants to use the space for something else. In homes priced above $350,000, the room becomes a true home theater - no window, tiered seating and more elaborate A/V equipment - but that's really the same thing, just like a Timex and a Rolex are the same thing."
Is Dallas Different?
We have few statistics to indicate that what is happening in Dallas and Fort Worth can or will happen elsewhere. Most of the evidence, even in Dallas, is anecdotal. And yet it seems logical that men in Phoenix and Atlanta are similar enough that the powerful appeal of home theaters to males might work there just as it does in Texas.
Of course, Dallas buyers get a lot of house for their money. Especially at prices above $300,000, they get well over 3,000 square feet. Homes that size have more room for flex spaces than similarly priced California or New York houses. And there's no evidence Dallas families are giving up needed bedrooms to put in a home theater (although when Choice offers a 400-square-foot media room option in a 1,400-square-foot house, you have to wonder). Unquestionably, historically low interest rates play a role in this, tempting buyers to include toys in their mortgages because they can afford to do it. Still, the real question is: Just how widespread is the powerful appeal of home theaters to men?
To spur sales of electronic and home entertainment equipment, Best Buy recently launched a pilot program in Dallas with production builders William Ryan, Engle and Newmark.
Best Buy's "Networked Home Solutions" provides the builders with a home network they can offer as a standard feature. "Coaxial cable, phone lines, everything goes into our connection center, and then those connections are available in any room," says Nancy Kielty, Best Buy's director of in-home integration. "On top of our basic service, which includes the pre-wire for networking computers, we have options like 'Movie Buff' that allows a home theater and 'Music Lover' that allows a whole-house audio system."
Tom Watson, William Ryan's Dallas division president, says the firm soon will settle into a pricing niche centered on $210,000. "We think the Best Buy brand will do us good," he says. "They can provide the equipment our buyers need for home theaters. We get discounts and coupons our buyers can use at the stores. We can see media rooms' appeal, especially to men, in this market. Of the six model homes we have now, three have home theaters, and three have game rooms upstairs, with a plasma TV on the wall. If our buyers elect to do a home theater, Best Buy will do the installation."
|The Drees Co.'s 5,093-square-foot, $589,990 Hickoryglen model (shown at Kirkwood Hollow in Southlake, Texas) wows shoppers with a benchmark home theater typical of Dallas' high-end market.|
"This is really about men watching sports on TV with their buddies," Darling Homes sales agent Tom Prince says. "It's really a powerful be-back tool for us, and it's the men who come back, with their friends, to show them what it's going to be like to watch football in this space on Monday nights."
Tony Militello owns Sound Image, one of the best-known home theater installers in Dallas. "I can't tell you how many times the husband in the family has told me this is going to be his space," he says. "It's a point of negotiation between the man and the woman. She gets what she wants everywhere else, but he wants that media room as his own."
The Drees Co. is very clever in its merchandising of theaters in model homes. "A model home is a visual experience, first and foremost," says Kenny Kehoe, new construction manager for Stereo East. "Drees is careful to arrest visitors with a moment of impact right at the top of the stairs. In most cases, you look through the game room and an open doorway into the theater. You see a huge screen. If the space calls for a 100-inch screen, we'll put a 130-incher in there. That moment of impact never leaves the buyer."
Drees Dallas division president Ron Davis says model home theaters give new home builders a tremendous edge in their competition with existing homes. "It would cost three to five times as much to retrofit a theater into an existing home," he says, also pointing out that builders' ability to roll the cost of a theater into the mortgage is vital.
Home theaters do not replace family rooms in Dallas homes. In fact, the audio/video installers tell us they often put a flat-screen plasma TV and surround sound into the family room at the same time they install a theater projection system.