Tuesday, February 5, 2013

New Jersey Welcomes Modular Home Construction

It's interesting to note that the post-Sandy construction will probably boost the sale of modular homes to a point that has never been seen before by many East Coast modular home factories. I have been talking to several builders and modular factory owners about why this is happening and it turns out the answer is quite simple. It's the sheer magnitude of the problem.

The old saying that a site builder can build a home inexpensively, quickly or of high quality with the buyer gets to choose two of the three is still valid for site building.

In the towns ravaged by Hurricane Sandy however, pickup trucks from all other the US are showing up loaded with opportunistic home builders trying to jump into the desperate rebuilding market. Some of them are already booked two years out. Most of these "pickup truck" builders offer none of the three options. They are usually high priced, take up to a year to build a house and a lot of them have questionable craftsmanship. Watch for stories of 'out of state' builders showing up, taking a bunch of deposits and skipping town. It happens after every natural disaster.

But the more level headed homeowners in these areas know that going with a reputable local builder, one that they probably know personally and has lived through the same problems as them, is still the best and safest way to recovery. And this is where modular housing can come to the rescue.

These local builders are being inundated with requests, hundreds of them, but can only build about 20-30 if they can find the qualified laborers which is proving difficult.

Now these builders are turning to the modular home factories on the East Coast for help. There is a ton of capacity in PA where modular factories seem to grow like mushrooms. The New England factories are jumping in to help as are factories in the South. Lots of new builders want to be able to help their neighbors rebuild using modular construction which will mean that the homeowner CAN now get all three things...price, speed and quality. Hurrah for modular!

Today I learned that several major factories are NOT welcoming these new builders. The factory owners and management have told them that they already have an authorized builder in their area and can't help them. This is one of the most puzzling things I've ever heard of. If the factory thinks that their one builder can make a dent in towns were thousands have lost their homes, they need to wake up and smell the Starbucks.

Let's take a look at this hypothetical situation. Suppose a town has 5,000 single family homes and 2/3 of them have been declared unlivable by FEMA. That means that over the next two or three years more than 3,300 homes will have to be built. Now suppose the town has 2 modular home builders and 20 site builders and they all build 30 homes a years, the modular industry will deliver 60 homes and the site builders will try to build 600. If the factories would encourage more site builders to buy modular homes, say getting another 10, that would give the factories a total of 360 homes instead of 60! DUH! 

This is the perfect time for the modular home factories to make a big impression on not only homeowners but builders and the public perception of modular housing. Will some factories step up do this...YES. Will others stay the course and let their one authorized builder try to handle all the requests for housing that can't be built.

I've had several builders tell me that this has already happened to them and have gone from factory to factory before finding one that will help them. Maybe it's time to dust of the old business and marketing plans and update them to the new reality of New Jersey.


John said...

Epoch Homes would be happy to work with NJ Builders. Please give us a call. 603-225-3907 x33. WWW.epochhomes.com

Anonymous said...

I didn't know Epoch would deliver to NJ. If I have any more trouble with my current factory, expect a call.

kevin smith said...

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