Friday, April 18, 2014

Excel Homes Delivers Apartment Complex to New Jersey

Excel Homes just delivered a nice apartment building to Madison, NJ for Royal Wave Development.

The Ridgedale Condominium Project is located in Madison, New Jersey and is a large three story apartment building catering to high income residents of the Madison NJ area. The building consists of 13 large living units on three levels over parking and storage space.

Modular construction is being used by more developers than ever because of controlled costs and time to completion. Being able to complete these projects in a few months instead of up to 18 months for site building, means that the revenue stream begins quicker and the entire project is more profitable.

When Frank Hanlonfhanlon@excelhomes.com, from Excel’s Liverpool, PA plant brought in this order, he knew that once the developer uses modular for the first time, it wouldn't be their last. If you need a project completed quicker and with a tighter rein on costs, modular is the way to go.

Here are pictures of the Ridgedale Condominium project.

April's Builder Breakfast Brings Industry Leaders Together

My monthly Builder Breakfast has grown so much from its humble beginnings of just a single builder meeting with me and talking about the problems of modular housing into what it is now, a forum for the entire modular home industry’s future.

This month the number of people that wanted to attend was so large that I had to move it to Holiday Inn convention center. Attending were factory people, modular home builders, engineers, Architects, Norm Hall from Simspon-Strongtie and Tom Hardiman, the Executive Director of the MHBA.

Jay Barlow, Barlow Engineering, was the featured speaker for this meeting and talked about the importance of bringing in an engineer during the beginning stages of builder talks with the customer. Waiting until the plans are drawn and the contract signed can mean thousands of dollars out of the builder’s pocket. It was eye-opening for everyone.

Jay Barlow, circled; Chris Minium, PBS to the left of Jay; Anthony Zarrilli, Zarrilli Homes in NJ; Ken Semler, Express Modular; Dan Hobbs, GM of Hancrafted Homes and Denise Jacoby, Director of Frederick County Builders Assoc.

Tom Hardiman from the MHBA talked about all the areas that our association is working in to help promote modular housing and lobby for our industry in just about every state. He also invited everyone at the breakfast to join us at the “Best Practices” conference in Philly next week.

Tom Hardiman, Executive Director of the MHBA

Finally Harris Woodward, owner of FinishWerks in Savage, MD, showed us how he builds “High Performance” houses and the inherent advantages modular housing gives him in achieving Energy Star ratings in the 50’s and below without adding much to the homebuyer’s total building cost.

Harris Woodward, Owner of FinishWerks in Savage, MD

And finally, after the breakfast ended about 10:30, there were groups of people continuing to talk in the lobby and nooks everywhere with some of them even going to lunch.

This is what happens when the movers and shakers from the modular housing industry get together and talk about our problems and solutions. 

If you are interested in joining us for the May Builder Breakfast on Wednesday, the 21st, drop me a line at Modcoach@gmail.com.

Thursday, April 17, 2014

New Video Shows the Magic of Blu Homes' Oragami Folding Modules

When Woody Bell, a well respected modular industry veteran, says something is good, you can take it to the bank. In this case, he is singing the praises of Blu Homes. Don't get me wrong, they still haven't won me over but this video goes a little way to making me less a skeptic.

Tuesday, April 15, 2014

NRB Wins MBI's "Best of Show"

NRB, commercial modular manufacturer won this year’s ModularBuilding Institute’s "Best of Show" and First Place in Commercial Housing awards for the Muhlenberg College Dormitory addition; a 6,000 sq. ft., 3 story building that emulates the surrounding circa 1900 campus architecture, yet offers modern day amenities. 

The off-site construction process allowed NRB to build in a controlled environment away from the project site and then install the 20 modules in the tight restricted campus area with minimal site disruption and no disturbance to mature surrounding landscape. 

Multiple Factors Affecting Housing Market Decline

Multiple Factors Affecting Housing Market Decline

Housing market experts lack confidence in an improvement in the housing market, especially the construction sector. Some are pointing fingers at the weather and others are blaming banks unwillingness to take mortgage lending risks. Many suggestions are hitting the air waves, but no one comes forward with solutions to help the housing market getting back to normal.

It is easy to blame the weather or economic conditions, when earnings decline and economic indicators are in a freefall, said a February article on the Daily Gains Letter (DGL). DGL and some market experts state that blaming the weather is a little farfetched. Instead, one should look at weaknesses inherent in the housing market. 

“Judging by all the headlines, you’d have to be daft to think the sharp decline in housing market construction could be blamed on anything but the weather. But if you actually delve into the numbers a little, you’ll see that weather is the least of the housing market’s problems,” according to DGL.

Weaknesses in the Housing Market

Just to name one problem, new construction has been lackluster in the Northeast, Midwest, as well as in America’s South and West. The three month builder National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) fell during March in all regions. It fell by four points in the South and three points each in the Northeast and Midwest

The HMI is derived from a monthly survey of NAHB members. Survey questions include rating of market conditions for the sale of new homes over a certain period of time. It also asks to predict the number of possible future buyers of new homes. 

According to NAHB, reasons for the drop in builder confidence are the lack of building lots being in short supply and skilled labor is hard to find.

FitchRatings does blame the snow and rain storms for a decline in new construction of housing, but includes a caveat that other concerns affecting the housing market come also into play. 

CoreLogic did an in-depth analysis on the effect of weather on the housing market and found that weather conditions do affect the market. But, the weather condition is not “sufficient enough to counteract the current weakness in the market.”

In a March report, the National Association of Realtors (NAR) said, “constrained inventory, restrictive mortgage lending standards and housing affordability less favorable than a year ago,” is affecting the housing market.

Mortgage as Major Impediment

Besides the weather and construction industry confidence, other major housing market weaknesses are mortgage availability and job growth. 

“Mortgage credit isn’t nearly as easy to get as it was during the housing boom, and it shouldn’t be,” stated a recent article on the HousingWire website.

However, the same article states that as long as lenders sell their mortgages to the two mortgage giants Fannie Mae and Freddie Mac, they don’t need to tighten their underwriting standards. Actually, mortgage lenders might still reduce these standards even further to increase their lending activities.

Lending activities were far lower in the first quarter of 2014 over the fourth quarter in 2013. 

According to an early April report by Inside Mortgage Finance, new home loan securities issued by the two mortgage giants Fannie Mae and Freddie Mac declined by 29.1 percent between the two quarters.

Furthermore, the volume of securities sold by the two mortgage giants dropped by 63.7 percent in the first quarter of 2014 over the first quarter in 2013. These decreases in providing funding to the housing markets represent the lowest quarterly total in 14 years.
The latest Mortgage Bankers Association (MBA) Mortgage Credit Availability Index (MCAI) increased by 0.44 percent in March over February. The MCAI focuses only on mortgage credit. Therefore, MBA states in its analysis that this is indicative of a loosening of credit.

Atypical Cause for Housing Market Problems

Mortgages, unemployment, builder confidence are generally used to analyze the housing market. However, a recent report by Michael Lombardi, states that homebuyers have been backing out of their contracts in large numbers.

“Underlining the strong sales of homes, the number of cancelled sales orders compared to overall sales (commonly referred to as the cancellation rate) is going through the roof,” said Lombardi. 

The builder KB Home’s first quarter 2014 financial results publication states that in the first quarter of 2013 and 2014, 30 percent of all contracts were cancelled.

Builder D.R. Horton, Inc. disclosed in its 2013 annual report that in 2012 and 2013, as a percentage of gross sales orders, 24 percent of contracts were cancelled.

NVR, Inc. the parent company of Ryan Homes, NVHomes, Fox Ridge and Heartland, disclosed in its annual report that for all its homes, contract cancellations amounted to 15 percent in fiscal year 2013 and 2012 and 14 percent in 2011. 

The problems in the housing market have a number of origins of which the most prominent are mortgage availability, true unemployment situation and builder confidence. 

The majority of house market predictions are lackluster. The CBS Money Watch predicts that mortgage rate will be capped at 5 percent, but easier to obtain. Housing inventory will drop significantly and home affordability will drop because of investors’ home buying spree. Overall, less people will be able to afford a home and more will become renters. 

Monday, April 14, 2014

Rebuilding Long Island after Hurricane Sandy

I just received these photos from Evan at Long Island Modular Homes in Jericho, NY. He told me that even though they still have a lot of Hurricane Sandy victims contracted to rebuild their homes, they are beginning to see non-Sandy home buyers signing contracts.

That is great news for everyone.

Here are some pictures from the latest home they finished in Bellmore, NY.

Coincidence or Newest Acquisition?

Does anyone know if Blu Homes used part of their almost $200 Million in marketing capital to acquire Blu E-Cig or is it just a unique coincidence? Hmmm?