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Are Factory-built Homes the Next Wave of New Construction?

By
Real Estate Agent with Coldwell Banker Vanguard Realty - 904-673-2308

Are factory-built homes the next wave of new construction?

An article from the online Realtor® news today announced that factory-built homes are becoming more acceptable. Their cost factor of 10-35% less, plus the short length of time to build is helping them gain in popularity throughout the country, says the Manufactured Housing Institute.

In the past it has been a challenge to secure financing for factory-built homes, but that may about to change with the increasing demand for this product. Manufactured housing needs to come up to speed on how to market. Many people don't realize that a factory-built house may withstand bad weather better than their stick-built house. Also, zoning boards are beginning to realize that factory-built homes don't look any different from a stick-built or concrete block home.

At NAR 2008, we saw manufactured housing that was so gorgeous and the elevations so charming, it would be no problem selling that product. My sister tells me there are $500,000+ homes on their lake in Virginia and they are factory-built. The folks up there know about the qualify of the construction and choose manufactured housing over traditional stick built. Look for more innovation as building supplies and other costs rise.

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About the Author: Sharon Alters works with her husband, Frank. They are in the top 5% real estate agents for production in the Jacksonville Florida area, specializing in Military and Corporate Relocation in the Fleming Island, Orange Park, St. Johns, St. Augustine and Beaches areas. Their local knowledge can help Relocating Buyers find the perfect lifestyle, whether it is a Castle on the Ocean, or a Cottage in the Country. 

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Christa Ross
RE/MAX Select Realty - REALTOR and Green Homes Specialist - Pittsburgh, PA
Helping you buy and sell Pittsburgh's Best Homes

Factory-built is the way most homes will be built in the future. There are just so many benefits to quality, cost and environmental that it is a trend that will only get bigger.

Jun 29, 2010 04:07 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

In my area, I don't see manufactured homes replacing tract developments.  However, there are remote areas in my local market that do not have access to city water and sewer, so manufactured homes make sense -- one can live in a beautiful environment and it's not cost-prohibitive.

Jun 29, 2010 04:29 AM
Terry Chenier
Homelife Glenayre Realty - Mission, BC

Sharon,

This must be an American phenomenon. Haven't heard much about it here.

Jun 29, 2010 05:09 AM
Erik Elsea
Erik Elsea-Jones & Co. Realty - Fort Myers, FL

I have sold tons of factory built homes during the construction boom a few years ago. The quality was amazing and build times were super short compared to site built homes. They are the wave of the future.

Jun 29, 2010 05:28 AM
Mike Saunders
Retired - Athens, GA

I think that once people understand the difference between modular and manufactured homes the modular will become more prominent. Modular have to be built to the same minimum construction standards as "stick-built" while manufactured do not. Once constructed, it is very hard to tell the difference between a modular and site built home. When in the constuction division of a large corporation we saved time and money using "tip-ups" which were basically modular office buildings that met the same code requirements as site built. And they looked pretty good too.

Jun 29, 2010 05:58 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

VB, I agree!

Don, they are actually rated very well for hurricanes because they are built in a factory.

Dan, there is a stigma to overcome, but price and quality speak loudly. You should have seen the homes we saw at NAR.

John, my only experience is in the Southeast, but I can tell you that apparently they have no problem with them at the lake in Virginia and there are some high dollar folks buying homes there.

National Security, quality control is stronger in a factory for sure. They are very vulnerable to lenders not being willing to lend them money.

Richard, that is a shame because there is a market for that product. The homes I am describing are probably better described as 'modular' because they bring the walls and put them on a foundation. I do not know about HUD tags and certificate? Will have to check this out.

Jon, I am talking about the type of home that is on a foundation.

Lenn, some stick built homes end up being sick homes due to exposure to weather. I would love to develop a subdivision of affordable housing with factory-built housing.

Claudette, it is exactly what this housing market could use. We just have to find lenders willing to break out and finance them.

Kathy, I wish I had photos of the ones we saw at NAR. Simply gorgeous and looked like custom homes.

Brown Land, now that is something new. I guess they can do anything!

Phil, the lenders definitely need to give in to new ideas and quality.  Really? lol

Bill, they do not. My sister helped a friend build one on top of a mountain that was very charming and very cost effective. He was able to customize his home and save lots of money.

Alan, that is not right. It gives the impression that there is something wrong with that type of construction when in fact, it can be superior to some site built homes, as Lenn and others have said.

Joe, it is my understanding that these homes are definitely rated for high winds and can compete with stick built homes.

Julia, you are talking about the right type. It is assembled on site.

Kate, they are definitely desirable in such areas but the cost and features make them compelling for more suburban areas in my opinion.

Charita, soembody needs to come up with a campaign to promote these homes.

Green Mountain, thanks for the great explanation of the difference. The homes are modular that we are talking about, placed on a foundation.

Dan, that is very interesting. Thanks for sharing.

Chad, perception - that is the key. And the HUD homes, too bad about those.

Betsy, very interesting! Great combination - modular and green. The ones we saw were just incredible. With DC prices, I can see how they would be attractive.

Mark, buyers do have to wait.

Sajy, it's a great time for them to gain traction for sure.

Richard, thanks for the information about manufactured homes.

Kathleen, don't know exactly what you mean by this. All homes require maintenance over time.

Michael, I think they have to be coming with the rise in bulding costs.

Christa, makes sense to me also.

Pamela, every area is local.

Terry, maybe so. But it might spread!

Erik, I totally agree with you. I just hope we can keep the factories here!

Mike, we need to educate the public about the difference. I can't tell the difference in the ones I have been in. They are finished just like a stick-built house.

THANKS EVERYONE FOR YOUR COMMENTS AND INSIGHTS AND THANKS ACTIVE RAIN FOR THE FEATURE :)

 

 

Jun 29, 2010 04:11 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Read this post by Don Spera - it is an excellent follow up to this topic!

Who Created the Stigma?

 

Jun 29, 2010 04:25 PM
Bryan Robertson
Los Altos, CA

Large builders have been using off-site construction materials for years.  The biggest misconception in the market is that modular homes are "mobile homes" and people get images of trailer parks.  The industry has been fighting the concept for years.

A few modular builders are working with developers on high-end modular homes in markets normally fit for million-plus dollar homes.  I think these builders (who are very "green" by-the-way) and others building quality homes in traditional developments will eventually change the perception.

Jun 29, 2010 04:51 PM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

Our first local "PREFAB" community was built in the 1940s.  I read this yesterday and started to say, something dumb like we do not have  modular homes in our market.   Then I thought about a presentation about a neighborhood in Central Ohio, Colonial Hills  where a local historian and home owner in the Colonial Hills community showed us the modular construction in his garage.  He'd torn out something and exposed what is not usually visible. 

Those homes have no trouble getting financing.  They have steadily increased in value since the 1940s.

Of course we have some manufactured homes, mobile homes in our market too.  

I am not sure if we have a lot of modern prefab.  I know of infill houses in existing neighborhoods that are prefab.  Often the neighbors are alarmed that the homes are not up to snuff.

Columbus Ohio was the site of a factory that built "Lustron" homes in the mid century... last one. Just after World War II. After reading Don's post yesterday I tracked down info on the entrepeneur who started that factory to see if it gave hints about "stigma," and it did. It seemed less to blame local builders for stigma of " prefab" than I expected and seemed to blame the  trade unions.   

 

 

Jun 30, 2010 01:48 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Bryan, the modular homes we have seen lately are definitely upscale and I think the time is right for the perception to switch. If they can tie into the green move, I think the public will be more interested.

Maureen, very interesting. That would seriously put a dent in the banks' argument against financing this type of home since these have been in existence since the 1940s!

Jun 30, 2010 01:54 PM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

There was another post spawned by this where a guy in Georgia (I believe) posted about a house in his market that he had listed sometime back.  He had disclosed it was "modular" (or was it manufactured?)  While NOT high end I don't think it could have been manufactured... anyway he was saying he had it listed "Prefab" or not stick built when he sold it. 

I've never seen anyone disclose homes in the 1940's neighborhood in Worthington are "prefab" homes.  They have steadily increased in value. 

 

Jul 01, 2010 01:34 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Maureen, what a contradiction! Would love to have them find out and have their anti-prefab theory blown out the window :)

Jul 18, 2010 02:44 PM
Don Spera
CR Property Group, LLC - East York, PA
Serving York and Adams County, PA

This is some great interaction. How such a great stigma was put on pre-fab's is beyond me.  Especially today.  However, we still have many buyers that want us to eliminate that from the search criteria.  No matter how well they are built, they still are gun shy.

Aug 01, 2010 02:07 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Don, thanks for stopping by! I think the stigma is going to be removed sooner rather than later.

Aug 01, 2010 09:08 AM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

Personally I am racking up the Report a Concern points on this one....

Aug 05, 2010 10:31 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Maureen, this is becoming a real problem. I'm thinking I'll have to discontinue non member comments. I have one post that has about 10 of them on it. AR just removed some of them today. I'm sure they're busy with other stuff, but I don't want this stuff on my blog.

Aug 06, 2010 05:05 PM
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

I sometimes close all comments on a post when they keep occuring on a post.  Just for awhile. 

On my blog I leave a comment saying spam reported then I go back and remove my comments every couple of weeks.  I think when it gets repeat spam it must be on a list.  

We can not just turn off outside comments on one post can we?  I wish we could when this happens.

Aug 06, 2010 10:43 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

I guess I could disable comments on this post. We can't turn off outside comments for only one post, but that's a great idea! It's a good sugestion to make to Bob or Brad.

Aug 07, 2010 05:53 PM
John DL Arendsen
CREST "BACKYARD' HOMES, ON THE LEVEL General & Manufactured Home Contractor, TAG Real Estate Sales & Investments - Leucadia, CA
Crest Backyard Homes "ADU" dealer & RE Developer

Hi Sharon, I know I'm a little late for this party but this is a great post. I'm so happy to see someone posting so positively about this subject as it's certainly sufferred unfairly for so many decades. 

I would like you to invite you to join our group and will certainly repost this very astute and well written post on my AR blog and my website. Thanks for such great information.

May 07, 2014 08:15 AM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Hi John, thanks for stopping by! I would love to join your group, but not sure what group it is. Please send me a link to it.

May 07, 2014 09:49 AM