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Modular Home Industry Analysis (2007)

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This is an economic analysis of the modular dome building industry, that I wrote in 2007. It also has some insight on the potential sustainability benefits of modular-built housing.

This is an economic analysis of the modular dome building industry, that I wrote in 2007. It also has some insight on the potential sustainability benefits of modular-built housing.

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Modular Home Industry Analysis (2007) Modular Home Industry Analysis (2007) Document Transcript

  • 
 MkLotus
House
by
Michelle
Kaufman
Designs,
2007
INDUSTRY
ANALYSIS:
PREFABRICATED
MODULAR
HOUSING 
 
 
 
 
 
 
 
 
 Steve
Puma,
Final
Project,
SUS6200

 Macroeconomics
and
Ecological
Economics,
Fall,
2007

 November
14,
2007

  • 

TABLE
OF
CONTENTS
Overview .........................................................................................................................................................3
 Background .................................................................................................................................................3
Industry
Analysis .............................................................................................................................................4
 Market
Trends ............................................................................................................................................5
 Opportunities
and
Threats .........................................................................................................................6
 Products ......................................................................................................................................................8
 Industry
Concentration
and
Analysis .......................................................................................................10
 Pricing
and
Competition...........................................................................................................................10
 Barriers
to
Entry .......................................................................................................................................12
 Cost
of
Production ....................................................................................................................................13
Market
Analysis.............................................................................................................................................14
 Market
Size ...............................................................................................................................................14
 Market
Demand .......................................................................................................................................15
Sustainability
issues ......................................................................................................................................16
Conclusion:
Industry
Outlook........................................................................................................................18
Works
Cited...................................................................................................................................................19


 2 

  • 
OVERVIEW
BACKGROUND

 Most
Americans
dream
of
owning
their
own
home.

However,
the
cost
of
buying
a
home
has
increased
significantly
dimming
the
hope
for
some
people.

More
importantly,
the
cost
of
building
a
new
home
has
become
truly
a
dream
for
most
people.

In
the
early
1990’s,
to
combat
the
rising
cost
of
owning
a
home,
pre‐fabricated
homes
increased
in
popularity.

A
pre‐fabricated
home,
or
most
commonly
known
as
a
‘modular’
home,
is
built
in
a
factory
and
shipped
in
pieces
to
the
owner’s
home
site.

The
time
and
cost
involved
in
building
and
erecting
a
modular
home
is
considerably
less
than
conventional
construction.

This
paper
will
look
at
why
there
has
been
such
an
increase
in
popularity
of
the
modular
home,
and
what
the
future
entails
for
this
business.

 In
the
early
1900s,
Sears,
Roebuck
&
Co.
began
marketing
modular
homes
entitled
‘House
by
Mail’.

These
homes
were
prefabricated
dwellings
that
gave
hope
to
Americans
who
dreamed
of
owning
their
own
home.

Currently,
there
are
approximately
120
manufacturers
in
the
United
States.

Some
of
these
companies
are
fully
integrated,
meaning,
they
have
their
own
sales/marketing
staff,
wood
lots,
sawmills,
plywood,
and
construction
plants.

With
the
improvements
in
construction
technology,
today’s
modular
homes
are
significantly
different
than
the
Sears
modular
homes.

The
difference
is
due
to
today’s
sophisticated
engineering
tools
and
machinery
used
to
build
the
homes.


 The
modular
home
industry
is
heavily
concentrated
in
the
East
Coast
of
North
America,
where
the
ability
to
construct
homes
indoors,
where
workers
and
materials
are
not
affected
by
severe
weather.

This
has
the
advantages
of
cost
savings
and
extending
the
manufacturing
window
to
the
entire
year
(in
addition
to
the
sustainability
advantage
of
better
working
conditions).

There
is
a
major
opportunity
for
growth
in
the
Western
region,
since
only
8
of
the
major
manufacturers
are
currently
located
West
of
the
Mississippi.

 3 

  • 

 The
Prefabricated
Modular
Home
industry
is
currently
experiencing
a
large
amount
of
growth
due
to
cost
factors
and
renewed
interest
in
the
environment
and
global
climate
change.

This
“environmental
factor”
is
poised
to
become
the
new
industry
standard,
as
many
facets
of
modular
building
lend
themselves
easily
to
efficient
building
practices
and
green
technologies.
INDUSTRY
ANALYSIS

 Prefabricated
or
modular
homes
are
constructed
using
three‐dimensional
boxes
or
"modules"
that
are
90
percent
to
95
percent
complete
when
they
come
off
the
assembly
line.

This
includes
interior
walls
and
finish
work,
and
exterior
siding.

Also
utility
work
and
conduit
lines
as
well
as
and
interior
walls
and
stairs
are
complete.
A
pre
fabricated
or
modular
home
is
usually
shipped
in
two
or
three
sections.

It
arrives
on
a
building
site
just
needing
to
be
set
and
attached
to
the
foundation.

Several
modules
can
be
connected
side‐by‐side
or
stacked
to
create
a
finished
home.
When
completed,
most
modular
homes
are
composed
of
groups
of
two,
three,
or
four
modules
(boxes)
fastened
together.
Most
modular
manufacturers
design
their
homes
with
integral
roofs
that
are
hinged
so
they
will
lie
flat
during
shipment.
For
steeply
pitched
roofs,
an
extra
roof
unit
is
sometimes
required.
For
roofs
with
multiple
configurations,
some
manufacturers
provide
individual
roof
trusses
that
must
be
installed
and
sheathed
at
the
site
to
finish
the
structure.
This
increases
erection
time
and
project
cost
but
provides
increased
design
flexibility.
Modular
homes
are
constructed
to
minimize
the
cracking
of
gypsum
board
sheathing
during
shipment.
Most
modular
manufacturers
construct
each
box
with
floor
and
ceiling
joists,
even
when
boxes
will
be
stacked
vertically.
(MSU
P1875
factory
built
housing,
2007)

 There
are
approximately
120
different
modular
home
manufacturers
across
North
America,
with
a
larger
concentration
of
them
located
along
the
east
coast.

With
the
rising
costs
of
building
stick‐built
homes,
the
momentum
for
prefabricated
homes
is
gaining.

However,
with
the
rising
costs
of
materials
and
need
for
education
on
the
part
of
the
financial
industry
and
the
public,
the
industry
may
not
be
as
good
a
deal
for

 4 

  • 
people
dreaming
of
owning
a
home.

Regardless,
the
modular
home
industry
is
growing
larger
and
meets
the
needs
of
different
populations,
from
first
homes
to
vacation
homes.
MARKET
TRENDS

 Ranging
from
approximately
$100‐$300
a
square
foot,
modular
homes
are
becoming
increasingly
popular.

Additionally,
the
trend
is
moving
towards
‘green
built’
homes.

Green
built
homes
are
homes
built
with
environmentally
friendly
materials.

David,
Newey,
director
of
client
services
for
Southeast
region
of
Empyrean
states:
“As
housing
costs
rise
and
as
people
become
much
more
focused
on
materials
and
quality
of
construction
and
quality
of
performance
of
the
house
.
.
.
the
market
will
demand
this
type
of
construction
and
demand
that
houses
perform
better”
(Triangle
Business
Journal,
2007).

In
order
for
the
modular
home
industry
to
truly
‘take
off’,
education
of
how
the
homes
are
manufactured
is
necessary
to
ensure
that
the
public
does
not
confuse
modular
homes
with
mobile
homes.

There
is
a
certain
stigma
in
the
United
States
regarding
“mobile
homes”
or
“pre‐manufactured”
homes.

The
stigma
keeps
people
from
otherwise
considering
this
very
affordable
and
efficient
way
to
get
a
home
built.



 Another
important
factor
affecting
the
modular
home
market
is
the
labor
force
in
the
United
States
and
Canada.

In
many
areas,
the
skilled
labor
force
necessary
to
build
custom
“stick
built”
homes
isn’t
available
due
to
a
very
tight
labor
market
so
homebuilders
charge
a
premium
and
establish
waiting
lists
for
clients
who
would
like
a
home
built.

Pre
built
modular
homes
require
little
skilled
labor
and
come
needing
very
little
done
to
be
a
fully
functioning
domicile.

With
an
order
to
move
in
date
of
8
weeks
modular
homes
are
quicker
to
move
into
most
cases
than
conventional
home.

With
modular
homes
costing
less
than
their
stick
built
counterparts,
they
offer
a
very
attractive
option
for
all
home
buyers,
not
just
the
first
time
buyer.

 5 

  • 

 If
the
modular
home
industry
is
able
to
gain
momentum
in
the
greater
housing
market
with
the
advantages
they
possess,
there
is
considerable
room
for
them
to
increase
their
market
share.

According
to
WIRED
Magazine
in
2007,
“AVI
FRIEDMAN,
AN
ARCHITECTURE
PROFESSOR
AT
MCGILL
UNIVERSITY,
ESTIMATES
THAT
5
TO
10
PERCENT
OF
ALL
NEW
HOMES
IN
NORTH
AMERICA
ARE
PREFAB
(AND
ABOUT
10
PERCENT
OF
THAT
MARKET
IS
UPSCALE).
HE
PREDICTS
THE
PREFAB
FIGURE
WILL
JUMP
TO
MORE
THAN
35
PERCENT
IN
THE
NEXT
10
YEARS.
“

OPPORTUNITIES
AND
THREATS

 There
are
several
opportunities
with
prefabricated
homes.

First,
the
production
costs
are
considerably
lower.

Not
only
do
companies
manufacturing
prefabricated
homes
gain
economies
of
scale
in
the
production
costs,
other
overhead
costs
are
also
shared
allowing
the
price
per
square
foot
to
stay
down.

Additionally,
pieces
of
the
home
are
produced
in
an
environment
where
the
climate‐control
ensures
the
workforce
is
able
to
complete
the
work
with
the
highest
quality,
unlike
a
traditional
builder
where
the
materials
sit
in
the
elements
of
the
weather
at
the
building
site.

Engineering
tolerances
for
products
are
finer,
and
the
construction
quality
better,
due
to
machinery
within
the
manufacturing
environment
using
a
stable
well‐trained
workforce
versus
a
different
subcontractor
on
each
job.
There
is
also
less
waste
of
materials
during
production,
as
there
is
time
and
data
for
quality
improvement
efforts,
such
as
a
six
sigma
initiative,
which
aids
in
lowering
the
cost
of
production.



 Second,
prefabricated
homes
are
eligible
for
traditional
mortgage
financing.

20
years
ago
and
even
as
recent
as
just
10
years
ago,
a
mobile
home
trailer
or
manufactured
home
had
a
lower
mortgage
term
and
classified
differently
than
a
traditional
home.

Today,
prefabricated
homes
are
built
on
foundations
and
are
of
a
least
the
same
quality
of
construction
as
site‐built
homes
are
and
therefore
qualify
for
30‐year
mortgage
loans
making
them
extremely
affordable.






 6 

  • 

 Third,
materials
used
are
usually
higher‐grade
materials,
focusing
on
green
built
technologies.

With
the
ability
to
machine
building
materials
in
manufacturing
facilities,
companies
are
able
to
build
homes
of
better
quality
than
can
be
built
on‐site.

Additionally,
workers
are
not
exposed
to
the
elements,
are
afforded
good
benefits
and
working
conditions,
and
given
training
and
access
to
the
latest
technological
construction
techniques
and
tools.



 Fourth,
modular
home
construction
undergoes
similar
permit
and
building
code
inspections,
as
does
its
traditional
stick‐built
counterpart.

With
the
quality
improved
and
the
majority
of
the
home
prebuilt,
the
onsite
inspection
required
is
minimal.

Modular
homes
must
conform
to
the
same
state
and
local
building
codes
as
do
other
residences.
The
Building
Officials
and
Code
Administrators
National
Building
Code
is
the
most
commonly
enforced
of
the
national
codes.
In
most
cases,
a
multi‐step
process
happens
for
each
house
being
manufactured.

Plans
are
submitted
to
local
authorities
for
building‐code
approval.
Then
building
inspectors
must
approve
the
manufacturing
process
and
the
construction
of
the
actual
units
before
certification
is
granted.
This
is
sometimes
known
as
a
“third‐party
plan
check”

(Cornelius,
Puma
and
Sowers,
2007).

Upon
the
granting
of
certification
for
a
model
of
a
home,
a
state‐approved
label
is
affixed
to
each
unit.

 A
threat
that
exists,
is
the
confusion
that
these
are
expensive
“mobile
homes”.

Education
to
the
public
about
what
modular
homes
are,
and
the
differences
in
construction,
must
occur.

Another
threat
is
that
the
financial
industry
may
not
have
experience
in
drawing
up
loans
for
prefabricated
homes,
thus
making
obtaining
financing
harder
for
individuals.

Stuart
Tyrie,
a
vice
president
of
Wells
Fargo
Home
Mortgage,
recommends
“anyone
thinking
of
buying
a
nontraditional
house
should
spend
time
speaking
with
prospective
lenders
to
make
sure
they
have
experience
making
loans
on
this
type
of
home.”
(New
York
Times,
2006).

Another
threat
is
there
may
not
be
a
cost
savings
as
initially
thought.

For
instance,
not
only
does
the
buyer

 7 

  • 
have
to
obtain
financing
for
the
modular
home,
but
the
buyer
will
also
have
to
pay
for
the
land,
taxes
and
permits
required.


PRODUCTS

 Modular
homes
must
be
built
strong
enough
to
withstand
the
transportation
to
the
construction
site.

Subsequently,
there
is
a
floor
and
ceiling
built
even
if
it
is
a
two‐story
home,
along
with
thicker
walls
than
a
standard
supporting
wall.

Stalwart
Built
Homes,
located
in
Florida,
build
LEED‐certified
homes
that
withstand
200‐mile
an
hour
winds
generated
from
hurricanes.1



 Connor
Building
Company,
located
in
Vermont,
builds
“panelized”
homes,
similar
to
modular
but
requiring
more
assembly
at
the
home
site.

For
instance,
portions
of
the
panelized
home
are
built
at
the
factory,
the
structural
and
partition
walls,
as
are
the
rafters,
yet,
unlike
modular,
are
assembled
at
the
home
site.

(Cornelius,
Puma
and
Sowers)

 One
of
the
benefits
of
a
modular
or
prefabricated
home
is
that
there
is
less
waste
of
materials.

“Rebecca
Woelke,
director
of
media
relations
for
Michelle
Kaufmann
Designs
(MKD)
in
Oakland,
California,
told
EBN
the
company’s
modular
homes
yield
up
to
70%
less
waste
than
typical
site‐built
homes.”
(ENN,
2007)

Also
noteworthy
is
the
fact
that
the
prefabricated
housing
industry
has
adopted
lean
manufacturing
principles
in
their
production,
which
is
designed
to
eliminate
waste
or
overstocking
of
materials,
which
costs
money
to
sit
in
storage.

 




































































1 
LEED
certification
actually
is
dependent
on
the
building
site
itself,
as
well
as
the
orientation
of
the
house
on
that
site,
so
this
company
may
be
misrepresenting
the
facts
somewhat.

 8 

  • 
Taken
from
the
2002
US
Census
Bureau
for
Prefabricated
Wood
Building
Manufacturing,
below
is
a
table
that
outlines
the
industry
statistics
by
primary
product
class.

 9 

  • 

INDUSTRY
CONCENTRATION
AND
ANALYSIS 

 The
table
below
is
taken
from
the
2002
Economic
Census
for
Prefabricated
Wood
Building
Manufacturing
by
the
US
Census
Bureau.

The
information
provided
describes
the
employees,
cost
of
materials
and
value
of
shipments.
 

 Prefabrication
homes
are
generally
operated
regionally
based
on
transportation
costs.
PRICING
AND
COMPETITION

 Buying
or
building
a
modern
home
is
expensive.

A
modular
home
is
a
well‐designed
home,
but
the
costs
can
still
be
substantial.

While
modular
homes
are
generally
less
expensive
as
than
other
alternatives,
there
are
companies
who
specialize
in
high
quality,
high
cost
pre
built
homes.

Most
times
the
pre
fabricated
home
can
be
classified
as
new
construction,
which
buyers
may
find
financing
difficult
to
obtain.


 10 

  • 
Generally
in
a
new
construction
loan
the
interest
is
higher
until
the
home
is
completed
at
which
time
the
loan
converts
to
conventional
home
financing.

Given
the
expanse
of
modular
manufacturers
with
a
clearly
defined
market
many
view
this
as
a
perfect
competition.

The
manufacturers
do
not
control
the
costs
for
everyone.

Rather,
the
fluctuation
of
costs
of
materials
would
eventually
dictate
the
price
structures
for
the
modular
homes
but
manufacturing
technique
and
economies
of
scale
could
still
help
to
keep
costs
under
those
of
conventional
stick
built
homes.

 Below
is
an
example
of
estimated
costs
for
a
prefabricated
home/building
site.

These
costs
vary
depending
on
the
area
where
the
final
product
will
be
erected.
“Costs
‐
A
Basic
Budget
Outline
 Costs
‐
Example
1500sq
ft
home
1.
Home
/
Structure
 1.

 $227,000

 i.
design
fees
 
 i.
$4,000

 ii.
materials/structure
 
 ii.
$210,000
($140sq
ft
x
1500)

 iii.
upgrades/finishes
 
 iii.
$10,000

 iv.
transportation
 
 iv.
$3,000
2.
Land
/
Site
 2.
$148,000

 i.
lot
 
 i.
$120,000

 ii.
site
work/foundation/hookup
 
 ii.
$18,000

 iii.
landscaping
 
 iii.
$10,000
3.
Financing
/
Taxes
/
Permits
 3.
$19,000
 i.
loan
costs/closing
costs
 
 i.
$4,000
 ii.
sales
tax/building
permits/fees
 
 ii.
$15,000

 
 Total
=
$394,000
(example
only
‐
cost
vary)”
(Prefabs.com,
2006)

 11 

  • 

 In
Canada,
Empire
Modular
Homes
is
Alberta’s
leading
manufacturer
for
modular
homes.

“Empire
Modular
Homes
is
proud
to
provide
modern,
attractive,
and
high
quality
manufactured
homes.
Our
modular
homes
display
excellent
craftsmanship
and
feature
the
latest
innovations
in
manufactured
home
design
and
construction.”
(Netvention
Company
Profiles,
2007).



 Bensonwood,
another
manufacturer,
provides
green
built
homes,
which
offer
environmental
benefits,
such
as
“better‐insulated
structures;
less
waste
from
construction;
reduced
transportation
impacts;
and,
in
some
cases,
easier
disassembly
for
reuse.
Prefabricated
construction
also
has
the
potential,
given
the
efficiency
of
factory
production,
to
deliver
these
benefits
at
a
lower
cost
than
site‐built
housing.”
(ENN,
2007)

 A
higher‐end
builder
of
modular
homes,
located
in
Stamford,
Connecticut,
builds
home
of
5,000
square
feet
and
larger,
catering
to
customers
who
desire
customized
details.

Darrell
Hoss,
the
builder,
chose
to
build
modular
homes
versus
stick‐built
homes
because
the
building
materials
are
kept
in
a
climate
controlled
area
and
the
overall
quality
of
construction
is
more
durable
than
stick‐built
homes.

Additionally,
the
employees
are
long‐term
employees
versus
hired
laborers
for
stick‐built
homes.
BARRIERS
TO
ENTRY

 The
modular
or
prefabricated
home
building
industry
has
several
barriers
that
make
entry
into
the
housing
market
difficult.

Public
opinion
is
the
number
one
issue
that
that
the
industry
faces.

People
continue
to
view
homes
that
are
pre‐built
as
being
made
of
lesser
quality
components
and
by
less
skilled
labor.

Overcoming
this
challenge
will
require
the
industry
to
work
together
as
a
whole
with
a
comprehensive
marketing
and
public
relations
campaign
to
change
the
public’s
opinion.

 Competition
remains
high
with
highly
competitive
large‐scale
on‐site
home
builders
who
use
economies
of
scale
to
reduce
the
costs
of
land,
materials,
and
labor.

Some
of
these
mega
builders
are
even
New
York
Stock
Exchange
traded
firms
that
can

 12 

  • 
invest
in
the
infrastructure
to
meet
buyer
needs.

However,
on
a
positive
note,
public
opinion
shows
there
are
hundreds
of
thousands
of
people
who
do
not
want
to
live
in
a
Planned
Community
and
are
looking
to
build
on
raw
land.



 XtremeHomes,
which
is
a
2‐year‐old
company
located
in
Oroville,
California,
has
been
able
to
lessen
its
barriers
to
entry
by
choosing
its
location
wisely.
XtremeHomes
intends
to
take
advantage
of
the
previously‐mentioned
large
market
opportunity
that
exists
on
the
West
coast,
as
well
as
the
increasing
interest
in
environmentally‐friendly
technologies.
XtremeHomes’
CEO,
Tim
Schmidt,
had
previously
been
working
in
Florida,
and
saw
a
market
niche
he
could
take
advantage
of.
(Schmidt)

 State
and
federal
regulations
also
have
to
be
followed
carefully
and
many
states
have
extremely
stringent
building
standards.

If
areas
become
too
built
up,
the
regulating
municipality
will
begin
to
tighten
the
amount
of
permits
issued,
and
there
will
be
intense
competition
for
the
limited
amount
of
permits
that
are
issued.


 Time
to
market
is
another
area
that
can
be
difficult
for
the
prefabricated
or
modular
home
issue
to
handle.

Although
it
is
possible
for
many
of
the
companies
to
deliver
a
home
ready
to
move
into
within
eight
weeks
this
tight
turnaround
time
is
not
always
possible.

If
buyers
want
custom
features
or
adaptations,
the
manufacturing
process
is
slowed.

Permitting
must
be
redone
or
amended,
and
the
whole
process
is
slowed
down.

Additionally,
when
demand
is
high,
the
homes
simply
cannot
be
built
fast
enough.

If
the
demand
becomes
so
high
that
factories
consider
expansion,
the
majority
of
companies
would
take
more
than
two
years
and
millions
of
dollars
to
build
a
plant
large
enough
required
to
produce
modular
homes.
COST
OF
PRODUCTION

 The
modular
manufacturers
have
general
specifications
that
have
costs
associated
with
them.

If
a
homebuyer
wants
to
upgrade
or
vary
in
any
way,
the
cost
rises.

This
is
much
the
same
as
a
regular
stick‐built
home.

“If
you’re
trying
to
do
sustainability,”
Quale
said
of
affordable
housing,
“you’re
going
to
be
using
materials
that

 13 

  • 
are
the
same
as,
if
not
better
than,
those
used
in
a
market‐rate
home,
so
you
need
other
strategies.”
(ENN,
2007)

The
cost
comparison
of
a
stick‐built
home
versus
a
modular
is
the
fact
that
with
a
modular
home,
everything
is
built
on‐site
and
then
shipped
to
the
home
site.

With
stick‐built
homes,
contractors
and
laborers
have
to
travel
to
the
site
and
materials
are
delivered
in
several
small
batches.

With
a
modular,
the
shipment
may
take
a
couple
of
trucks
and
a
crane
with
a
few
laborers
to
put
the
pieces
together,
reducing
costs.

”It
remains
vital,
however,
that
the
general
contractor
performing
the
onsite
work
be
familiar
with
modular
construction
and
the
procedure
for
ensuring
a
good
seal
between
modules.”
(ENN,
2007)
MARKET
ANALYSIS

 The
modular
home
manufacturer
market
is
located
across
the
country,
with
most
of
the
concentration
of
manufacturers
on
the
east
coast.

The
demand
for
higher‐quality,
lower‐cost
homes
is
increasing.

Both
the
changing
attitudes
and
evolving
nature
of
home
builders
and
home
buyers
will
have
a
major
impact
on
the
industry’s
prospects.
MARKET
SIZE

 The
top
10
manufacturers
have
each
built
a
minimum
of
500
homes
in
2006
and
have
a
combined
revenue
of
4
billion
dollars
with
the
top
company
approaching
5,000
homes
built
and
shipped
in
one
year.

The
top
10
Company’s
results
in
homes
shipped
and
gross
revenue
for
2006
are
listed
below.

 
 
 
 
 
 
 
 
 2006
Gross
Revenue

 “Company
 
 
 2006
Homes
Shipped
 
 
 (in
millions)
 1. Champion
Enterprises
 
 
 4,653
 
 
 
 $1,365
 2. CMH
Manufacturing
 
 
 3,166
 
 
 
 $1,328
 3. Palm
Harbor
Homes
 
 
 1,614
 
 
 
 $711
 4. Muncy
Homes
 
 
 
 1,346
 
 
 
 $85
 5. Excel
Homes
 
 
 
 1,200
 
 
 
 $111

 14 

  • 
 6. Ritz‐Craft
Corporation
 
 
 849
 
 
 
 $91
 7. Professional
Building
Systems
 
 781
 
 
 
 $58
 8. Royal
Concrete
Concepts
 
 
 600
 
 
 
 $68
 9. Liberty
Homes
 
 
 
 552
 
 
 
 $97
 10. Pleasant
Street
Homes
 
 
 526
 
 
 
 $57”
(Top
31
Modular/Whole‐House
Panel
Builders,
2006)

 As
the
market
continues
to
grow,
which
clearly
the
above‐cited
companies
are
proving
to
be
true,
new
homes
can
be
within
reach
of
almost
everyone
in
America
allowing
them
the
opportunity
to
afford
the
American
dream.

MARKET
DEMAND

 Modular
homes
have
increased
in
popularity,
particularly
in
the
northeast.

Martha’s
Vineyard
is
a
good
example
of
how
the
market
is
increasing.

At
least
a
quarter
of
all
the
new
houses
on
the
Vineyard
in
the
last
year
are
modular,
no
doubt,"
said
Tisbury
building
inspector
Kenneth
Barwick.
And
that
trend
will
likely
go
higher
as
time
goes
on."
(Boston
Globe,
2006)



 Currently
the
trend
of
all
new
homes
built
is
approximately
2
percent
of
the
market
being
modular
homes.

According
to
Fred
Hallahan,
principal
of
Hallahan
Associates,
which
is
a
firm
that
compiles
industry
statistics
in
the
Baltimore
area,
believes
that
the
trend
will
increase
to
seven
to
eight
percent
by
the
end
of
the
decade.
Below
is
a
graph
showing
the
increase
in
modular
production
from
1995‐2005:

 15 

  • 
 

 The
rise
in
modular
built
homes
in
Martha’s
Vineyard,
known
for
sprawling
estates,
is
“simple
arithmetic:
the
fewer
times
local
tradesmen
bang
a
hammer,
the
more
bucks
the
homeowner
saves.
Charters
rule‐of‐thumb
cost
for
a
budget‐conscious
modular
home
of
excellent
quality
is
$115
per
square
foot,
which
gets
the
buyer
a
place
in
move‐in
condition.
A
custom
home,
meanwhile,
starts
at
around
$200
per
square
foot
for
the
most
entry‐level
home
on
the
Vineyard.”
(Boston
Globe,
2006)
SUSTAINABILITY
ISSUES
 
 As
previously
mentioned,
the
prefabricated
modular
home
building
industry
is
a
perfect
match
for
sustainability
issues.

There
are
many
possible
advantages
such
as
the
following:

 16 

  • 
 • Efficient
use
of
raw
materials:
small
pieces
of
wood
and
other
materials
 can
be
use
where
possible,
unlike
the
typical
building
industry
practice
of
 discarding
them.
 • Ability
to
standardize
components
means
higher
quality,
more
efficiency
 • The
possibility
exists
for
co‐location
with
other
sustainable
businesses,
 such
as
power
co‐generation
and
recycling
facilities.
 • Better
working
conditions
for
construction
employees:
 o Stable
year‐round
employment
means
more
work
 o Longer
employment
means
better
trained
workers,
which
leades
 to
higher
quality.
 o Better
benefits
 o Workers
do
not
have
to
be
adversely
affected
by
weather
 conditions.
 • Houses
can
be
constructed
with
environmentally‐friendly
technologies,
 such
as:
 o “SIPS”
panels,
which
are
solid
wall
panels,
constructed
by
 sandwiching
2
pieces
of
plywood
around
an
insulated
core,
and
 are
very
energy
efficient.
 o Green
roofs
 o Energy‐star
certified
appliances
 o Specially‐designed
passive
heating
and
cooling
systems
 o Better
quality
means
better
seals
between
panels
and
sections.
 Given
the
previously
mentioned
growth,
the
ability
to
take
advantage
of
these
 green
technologies
means
that
prefabricated
modular
housing
can
have
a
huge
 impact
on
the
environment
and
climate
change
issues,
since
structures
account
 for
a
large
percentage
of
energy
usage
and
greenhouse
gas
emissions.

 17 

  • 
 
CONCLUSION:
INDUSTRY
OUTLOOK

 Although
prefabricated
home
construction
has
made
great
strides
in
the
home
manufacturing
market,
particularly
in
design,
construction
and
energy
efficiency,
there
is
still
a
lot
of
room
for
growth,
especially
on
the
West
Coast
of
the
Unites
States.

Even
though
some
of
the
manufacturers
are
building
a
green
product,
it
is
not
something
that
all
the
manufacturers
have
yet
mastered.

Specifically,
when
it
is
necessary
to
change
the
specs
of
a
home,
such
as
to
add
extra
insulation
to
make
it
more
environmentally
friendly,
there
may
be
more
expensive
in
the
long
run.
This
may
possibly
be
mitigated
by
taking
advantage
of
economies
of
scale,
as
the
auto
and
other
large
industries
have
done.
There
may
also
be
site
limitations
or
areas
which
are
not
familiar
with
the
building
process.

In
essence,
the
prefabricated
modular
home
building
industry
is
not
yet
the
standard
way
to
build
homes,
especially
green
homes,
but
the
industry
is
currently
positioned
so
that
it
will
not
be
long
before
both
of
these
things
are
the
industry
standard.

(McGraw‐Hill
Construction)

 18 

  • 

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CITED 
“Prefabs,
not
to
be
confused
with
trailers,
finding
a
niche.”.
18
November
2007
<http://www.bizjournals.com/triangle/stories/2007/08/20/focus1.html>.
"2006
Modular
Top
31."
2006.
1
November
2007.
Automated
Builder
Consortium.
Industry
Data.
2006.
1
November
2007
<http://www.altamonthomes.com/industry_data.htm>.
Budris,
John.
A
boom
in
modular
boxes
is
barging
into
the
Martha’s
Vineyard
house
market.
19
February
2006.
2
December
2007
<http://www.boston.com/realestate/news/articles/2006/02/19/home_delivery/>.
Bureau,
U.S.
Census.
"2002
Economic
Census
Industry
Series
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January
2005.
11
November
2007.
Cornelius,
Adam,
Steve
Puma
and
Mark
Sowers.
XtremeHomes
Operations
Plan:
Custom
Design
Services.
Operations
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San
Francisco,
CA,
2007.
Durham,
Tim.
COO,
XtremeHomes
Inc.
Steve
Puma.
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2007.
Generate,
Inc.
Netvention
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Empire
Modular
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LexisNexis,
25
October
2007.
Graham,
Frances.
Factory‐Built
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2
December
2007
<http://msucares.com/pubs/publications/p1875.htm>.
Kaufman,
Michelle.
MkLotus
House.
Michelle
Kaufman
Designs,
Inc.
http://www.mkd‐arc.com/.
2007.
McGraw‐Hill
Construction.
"Residential
Green
Building
SmartMarket
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Industry
Analysis.
2006.
Prefabs.com.
Prefab
Building
Costs
‐
The
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2
December
2007
<http://www.prefabs.com/prefab_financing.htm>.
Schmidt,
Tim.
CEO,
XtremeHomes
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Steve
Puma.
November
2007.
Tedeschi,
Bob.
Finding
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26
November
2006.
2007
18
November
<http://www.nytimes.com/2006/11/26/realestate/26mort.html>.
Vanderbilt,
Tom.
Some
Assembly
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4
November
2007
<http://www.wired.com/wired/archive/14.01/prefab_pr.html#_jmp0_>.
Wendt,
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Prefabricated
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Building
Environmentally
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28
September
2007.
BuildingGreen.
18
November
2007
<http://www.enn.com/green_building/article/23480>.
XtremeStructures,
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CA,
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 19 

  • 


 20