Thursday, May 10, 2012

New West Coast Prefab Company Enters the Market

Connect Homes, a new prefab company started by two guys with many years experience in design of prefab homes have decided that it's time to open their own company selling affordable green homes.  I read the "about our company" section in their website and was fascinated by this statement -
First, we took a step back and looked at the conventional home building industry, which we also spent many years working within. As most of us know who have ever built anything, the conventional home building industry is fraught with problems. It is an industry that basically reinvents the wheel with every new home.
Maybe the home buyers are different on the West Coast but in the East there is hardly a single home sold from the plan books provided by the modular home factories.  It is a good starting point but new home buyers want what they want and expect the builder to provide it. So these guys need to be prepared to start from scratch with every new client, which according to their own statement, is "fraught with problems."

connect-home 7.4

I wish them all the luck in the world with their new company but honestly, their homes look just like every other West Coast prefab including the homes designed by the self proclaimed "inventor of modular housing", Michelle Kaufmann. 

They really want to set themselves apart from the other West Coast prefab builders but guys, you just look like another lemming heading for the cliff.

2 comments:

Isaac Lassiter said...

Coach,

As a west coast modular builder, I can attest that we do not sell any plans from our plan book. We have tried and tried to encourage buyers in the direction of stock plans because the California permitting process takes a lot of time once the modular home plans are complete, and the mod plans usually take about 3 months here. Buyers always are suffering permit fatigue and 2-3 months time savings would help, but the type of buyers who can afford homes with cash or financing are probably the same in California as on the east coast. They have their money and credit for a reason and they want to get their home, not someone elses.

This is exactly the reason why modular home factories who have to go through the full 3rd party permit process at the state level and local permitting process are not, in my opinion, a viable business model in California. There are factories, including another one that just opened in California, who have aggressive long-term revenue goals based their expected market share. But, they are essentially trying to pull the camel through the eye-of-the-needle. Investors beware. The red-tape and process log-jam that is inherent to California's construction industry will weed out all but the most nimble of operators. This leaves an opportunity for the absolute best, but most will fail as history has proven. There is a long line of dead bodies on the side of this road. And when your products are highly boutique and with an expensive price point, those added barriers to entry to the market are like pounding the first nails in your own coffin.

It is sad to say but the only viable start-up opportunities on the west coast for home factories are probably for manufactured home factories to compete with the aged stock of existing brand offerings. At least industry has some real revenue on the west coast, and a HUDular factory can offer a more diverse product line. One company named Laurel Creek Homes in Phoenix tried this but shut down after a few years in 2009 or 2010.

Gordon Stott said...

Thanks for the best wishes.

One of the features that make the Connect:Homes system different is the ability to ship everywhere using the intermodal network. We don't ship with using "overdimensional" modules, per industry standard. This means transportation costs are brought low enough that a single factory can serve anyone who wants a "west coast style" modern prefab, regardless of where they live. The single factory lets us oversee output in a way that is difficult with multiple factories. (Because of high delivery costs of overdimensional modules, multiple factories are typically necessary in modular). It also makes us exponentially more efficient.

Ultimately, we are architects who like modernism and who have developed a system that can actually deliver high design homes anywhere at a much more affordable price point that previously possible. Since we are architects, we know that people want custom and have developed our system so it can flexibly accommodate client's desires. It may not be your cup of tea, stylistically. But there is a growing national and internation market for this style of home. Other companies haven't purpose-designed a new modular system and can't serve beyond regional markets. That is largely what has kept "west coast prefab" on the west coast.

We hope to be coming out soon to the east coast with our prototype. Will keep you posted.