Tuesday, July 10, 2012

Inside Look at Modular Home Factory Forecast

Yesterday was an extremely busy day for Modcoach with more than 100 emails and 20 phone calls all related to the modular housing industry.  With every call and email I usually ask "how you doing right now?"  I expected to hear a wide range of responses but instead I got a consistent pattern of answers and guarded optimism.

Just about all the factories have enough work to keep them running 5 days a week but not at capacity.  All had a strong 1st quarter with both production and sales running ahead of last year.  The 2nd quarter has proven a little sluggish for sales with production still at decent numbers.  I heard that most factories are quoting at a good pace which usually means the next quarter will be OK.  None of the factory people I talked with are even venturing a guess what the year's end will bring or the 1st quarter of next year.

Most of the factories are seeing a slowdown in multi-family projects both in production and sales as it appears that there might be a saturation point approaching.  A couple of factory people asked if I knew any experienced salespeople that were looking for work on the East Coast.  That's always a good sign.  Contact Modcoach if you would like more info.

Builders were also upbeat but I only talked with four.  They all said that they were busy building houses and quoting new ones.  Most have accepted the new reality of fewer houses than in the glory days and have adjusted their business model.

Overall, I think things are still at the bottom of the curve but everyone seems to be waiting patiently for the chain to take the roller coaster car to the top of the next hill.  Check it out!


Anonymous said...

I think most plants are breaking even right now. Better than losing money. However breaking even does not help cash flow. If things go up even slowly then all may be well. Can the plants handle another wave of down. I do not believe most have the cash to survive another long leg down. This is a sad and scary reality for many. On the bright size venture capital always seems to emerge at one time or another.

Anonymous said...

I agree, that I don't think there are many factories that can survive another long down turn. I also believe that what is happening in mortgage lending, is also what is holding things back from taking off. There are people that want to buy, but if they cannot get a mortgage they cannot buy.

Anonymous said...

This has been a strange year. After the first of the year, the phone started ringing and the quote rates went thru the roof compasred to last year at the same time. Then along comes laate may and June and it dslowed right down. I attribute the first uptick as the typical optimism resulting form New Years celebration. It's not like the demand for housing has gone down. New household formations are still at about 1.6M, so we should be strong. But there is a sense of doubt about hte future. Maybe typical of an election year, but the world economy seems to be making creating additionial doubt. Forecasting the balance of the year seems like some crystal ball is required. A downturn in housing now is not what any of us need. I also think that part of the slowdown is the reversal of the affodability index of reanting versus home ownership. Markets are reporting that it is becoming less expensive to own than to rent. A welcome sign to the building industry, but if lenders don't make loans, we don't build. I am not going to use this as political forum, but this administration has not done a single thing to help the housing industry at a time when their help could have gone a long way in stopping the drop in home values as this recesssion was starting. And today, they sit by and watch as the industry struggles to get it's footing again.

Anonymous said...

I think the homeowners that are looking at modular type construction are really shopping the options when it comes to what they get for the money.

SIP construction has been better this year for us than any of the last 3 years.

Modular construction has been around a long time and with the Hoo-Raa about SIPs construction and the lower cost of your typical stick frame built homes it may be taking the life out of modular.

I sold modular for years, but the concept seems to me to be old school now and many banks don't like to fund these types of structures.

If the modular industry would marry the two systems Modular and SIPS then you would have a product that would become more mainstream and acdepted.

This would create more sales, offer a much better product and point both industries in the right direction.

I know cost cost cost, waiting on production of SIPs and all the other transition issues have to be considered.

Consider change or consider going out of business.

As I tell everyone