While there have been challenges bringing these technologies to the market, Green Builder Media’s COGNITION survey shows that more than 60% of builders and homeowners believe that smart home technology is critical today, making it a priority for any home project.
The smart home technology that users demand isn’t just a cool tech device, it’s more about having automation to predict the homeowners’ needs, to monitor energy use and security, to optimize comfort and efficiency, and do all of this with real-time adjustments.
The evolution has been rocky. We still see off market smart gadgets in homes that have their own proprietary apps and are abandoned soon after the sex appeal wears off because it’s just one more thing in a growing heap of homeownership responsibility. But these one-offs are no longer acceptable.
There isn’t a distinct moment in time that heralds in the use of smart home technology or automation, it depends on many variations of the definition. My house was built in the 1960s, yet we still have smart applications, enough so that we get to learn from our behavior and compete with other smart home technology users striving to be more energy efficient.
We use a Nest thermostat, which sends us a monthly email quantifying our personal use and how it compares to the previous month, along with ways that we can improve. Plus, we see the holistic impact of the entire Nest community on a regular basis. The smart thermostat has been tracking this impact since it was first launched to the public in October 2011, saving billions of KwHs since then.
As my Nest use illustrates, most consumer interest in sustainability and energy conservation has advanced the development of smart home technologies. Homeowners now expect to have the ability to monitor and control household energy consumption, home environments, and indoor and outdoor appliances remotely, which when these were introduced quickly expanded into security and convenience technologies.
The advent of the Internet of Things guided the integration of smart home systems and devices, allowing home appliances to connect to the Internet and interact with each other in novel ways. Then in 2022, the Matter platform was launched to make it easier and feasible for different devices and ecosystems to play together. While the Matter standard has a focus on voice command, the sentiment was clear – there has to be collaboration and integration to make smart home technology successful for the homeowner and the builder.
Smart devices have helped move the needle for ongoing home maintenance according to Matt Walton, founder, home management site Homefile, but smart is different than intelligent. “There are tools available today that enable homeowners to connect and control these devices, but control is only part of the problem,” he said. “Turning something on or off remotely doesn’t make a system intelligent. What’s needed is orchestration—driven by data—to optimize the home as a whole, not just manage one device at a time.”
What Walton envisions for Homefile positions AI in a new context for homeownership.
“It identifies meaningful patterns—how your home is operating, how it's aging, how your financial goals align with what's coming next,” he said. “It knows when to act—and what action offers the best payoff.”
It won’t just tell a homeowner that the HVAC needs to be serviced, but it will offer insights on the return on investment for replacing it, such as a savings of $1,300 over three years.
A smart home becomes intelligent when it moves from isolated sensors to holistic insights, from generic alerts to personalized ROI, and from guesswork to confident decisions. This new home intelligence will provide big benefits to homeowners, as it also starts to transform the business model for those who serve them.
The smart home technology scene started with the consumer in mind and complicated the process for builders. Most product was made for a retrofit solution, not new construction.
Brian McCarthy is the owner of Albuquerque-based Abrazo Homes and has been building 200 homes per year for 15 years. Three years ago, he decided to change that dynamic and create something that served new home construction. Now, he’s also the co-founder and CEO at RioT Technology, a startup focusing on integrated residential technology, which today has 60 homes online and is streaming valuable data.
He sells packages, called Abrazo Intelligence, to builders that include sensors, valves, and devices, all prepared and preconfigured. Everything arrives to the builder in a box and removes the technological know-how and application from the builder and the trades who are able to use common install processes with the parts and pieces in the kit.
Then, after the devices go into the house, RIoT connects it all to the internet, giving the homeowner the ability to track leaks, weatherization, energy use, air quality and other operational basics via a kiosk in their home.
Having the kit makes it easy to install smart features in a new construction project, which has been a major hurdle for adoption. For example, the kit has a way to separate internal and external plumbing, which would be hard to zone out during a retrofit, but allows a user to shut off external systems before the first freeze, one of the most common warranty claims according to McCarthy.
The RIoT system goes beyond other preventative suggestions that can only be based on calendar intervals. By leveraging its installed sensors, RIoT knows when a filter actually needs to be changed—it can sense a pressure differential shift to see air pressure drop over a dirty filter. When that happens, McCarthy says he just ships a new filter to a homeowner because it is the number one most deferred maintenance by homeowners.
“The analogy is that we’re creating the check engine light for the home,” he said. “We are interested in the home performance to know if it is performing as intended. Also, homeowners and builders have been lacking the feedback loop, we don’t have a performance feedback loop. A homeowner might get a power bill, but that’s a singular data point to gauge the overall performance of the home.”
A utility company will check power usage but doesn’t weigh that against how the power is being used in the home. McCarthy says data from Abrazo Intelligence will be able to track the temperature of the home as function of the building envelope against the weather forecast. It also would be able to tell if the ERV failed, shut off or stopped, which could put a homeowner in an unhealthy environment rapidly.
While airtight homes are good from a performance perspective, the risk for the builder skyrockets with that type of construction. The data driven approach to quantifying ERV performance will help builders and homeowners understand the need, ROI and performance.
These smart systems also lower warranty expenses for the builder by having the monitored systems in place to offset risk tied to the warranty expense.
According to Parks Associates research group, smart home device adoption increased fivefold in the past ten years to 45% of U.S. internet households. Elizabeth Parks, president at Parks Associates has been pointing to the increase in home services as a result of that growth.
The company’s study Smart Home Services: Safety, Prevention, Comfort reveals that 66% of U.S. single- family homeowners are likely to adopt technology-enabled home services, such as smart HVAC monitoring, leak detection, and home technology support. This signals another evolution in smart home technology that moves standalone devices to integrated service models.
Walton’s Homefile is banking on the same opportunity—offering a way for builders, energy consultants, and service providers to be inside every customer’s home, every day. He explains that Homefile acts like a virtual account manager that can monitor for opportunities, surface needs, maintain records, and build trust.
A service provider on the Homefile platform doesn’t have to wait for a service call, the system keeps it present, relevant, and proactive.
“This unlocks new potential, including standardized service plans, bundled recurring offerings, and improved demand forecasting,” Walton said. “Businesses can reduce customer acquisition costs while increasing lifetime value. Homeowners, in turn, get continuity, not just transactions. Most importantly, this entire system is built on trust.”
Parks Associates reports that HVAC monitoring services and fire safety monitoring services each could generate more than $2 billion in annual recurring revenue. And, to Walton’s point on trust, the majority of consumers surveyed by Parks Associates, prefer trusted brands like security companies and professional contractors to deliver smart services. The Parks Associates study highlighted a couple other trends related to the smart home evolution worthy of being pointed out here. First, rising electrification from home appliances and electric vehicle adoption is putting new demands on the U.S. energy grid, which isn’t in a great position to handle extra load. Plus, these same homes want smarter, more immediate ways to manage energy consumption and costs, putting addition pressure on the system.
“I believe we are on the brink of an energy revolution,” said McCarthy of RIoT Technology. “We need more data and more analytics, and we need more granular control of the devices and appliances in the home consuming power.”
That data is making everyone in the smart home space more efficient and effective. Right now, McCarthy says that he offers energy efficient upgrades in his design center. A homeowner can choose between R-49 standard insulation or can upgrade to R-60, but the value proposition for the upgrade cannot be substantiated. In the future, McCarthy will be able to pull data from the homes that have Abrazo Intelligence and show the homeowner the performance and the return on investment with better insulation, offering quantifiable information that puts performance data in the homebuyers’ hands.
In the past, home privacy meant blinds, but now it’s the invisible data flying in and out of the home from dozens of devices.
Similar to RIoT, Homefile is creating predictive playbooks for every home, or living documents that track history, guide future decisions, and can then transfer to the next owner. Walton says that Homefile is very appreciative of that and won’t sell or share data, instead focusing on making the data work for the homeowner to prioritize service delivery and long-term relationships.
“That continuity increases resale value, improves insurance alignment, and drastically reduces the financial shocks that come from unexpected breakdowns,” Walton said.
The future has a lot of potential for smart home technology and those at the forefront are banking on the data that is being streamed along with the services it will need.
Publisher’s Note: Green Builder's 20th Anniversary celebration is sponsored by: Carrier, Trex, and Mohawk.