Monday, August 19, 2013

Modular Home Builders Suffering from Modular Myopia

At the last builder breakfast meeting, I asked the builders if they were “modular home builders or new home builders that used modular construction?”

The look on their faces said it all. They weren’t sure what they were. One said that his clients all knew that he was a modular home builder and his website reflected that. Playing the devil’s advocate, I asked how many new home buyers don’t go any further into his site than the opening page after they seeing the word “Modular?” He suddenly looked a little confused about what he was promoting.

Another builder said that he built both site and modular depending on the client and really doesn’t mention that he is a modular builder until he decides that best home for his clients.

And yet another builder said that he promotes energy savings and green construction on his site and views modular construction as the only way to do it, so his website is totally geared to those energy saving home shoppers.

Shhh,  Don't tell anyone about modular homes

All three of these builders are suffering from condition I call “modular myopia” or shortsightedness brought on by the modular industry itself. I’ve done several articles asking just what we are trying to sell to the new home buyer. Is it modular, system built, manufactured, prefab or some other term? The factory folks, at least the ones that build modular home that East Coast builders use, do nothing collectively to tell new home buyers why they should consider modular construction in their new home.

I was told by several modular factory owners that it would cost a lot of money to mount a marketing program but I disagree with that.  Michael Vick, the NFL quarterback convicted and jailed for running a pitbull fighting business, hired a PR firm after he was released from prison to improve his image when he wanted to return to football. Not only did it work beautifully, he was offered a $20M contract and the PR firm only charged him a little over $100K! My God, Blu Homes could finance the entire project out of their marketing budget and still have $50M left over! Click here to read about the PR company that saved Vick’s career.

If that were to happen in the modular housing industry, maybe you wouldn’t see articles like the recent article from the Wall Street Journal where they praised modular homes, interviewed John Colucci from Westchester Homes about the benefits, and then in the next breath, talked with a site builder that kicked the entire article in the teeth and questioned everything good about the article.  Click Here to read the article.
"It looks beautiful," said Anthony Rusciano, a local 51-year-old utility worker in Seaside Heights who is buying a three-bedroom modular home from Westrum for $179,000. "It went up so fast. I don't have the time or patience to deal with any of this stuff anymore.
John Colucci, vice president of sales and marketing, Westchester Modular Homes Inc., said while New York remains a tough market, he had been building one to two houses a week since the spring for Sandy victims primarily in New Jersey and Long Island. Sales are up 80% over last year, he said, mostly due to Sandy.
But Gerry Romski, who was recently selected by the city to help residents of Breezy and the Rockaways develop new homes said he won't use modular construction due to concerns about quality, fire-resistance and sacrificing interior space to bulkier construction. "We're doing a typical stick-built construction, which we have been doing for the last 25 years," he said.
And this brings me to the shortsightedness of the factories. If it weren’t for Hurricane Sandy last year, several modular home factories would not be operating this year. Even with Sandy, modular factories on the East Coast are closing. Before Sandy, a lot of residential modular factories switched over to commercial and large multi-family project just to keep the doors open. Small builders, who used to be the life blood of the factories, were not doing so well either at the time but when they tried to ramp up their business because of the housing recovery, many found out that their factories had abandoned them or were financially hurting and ready to close their doors.

Without a solid marketing program for residential modular home builders, paid for by the factories themselves, the small modular home builder could be a dying profession. If future new home buyers never hear about the advantages of modular home construction, then we have no one but ourselves to blame.


Let’s all work together to help cure “modular myopia.”

1 comment:

Anonymous said...

Perhaps Tedd Benson's suggestion that the word "montage" be a preferable alternative to modular or pre fab? See his reasoning here: http://teddbenson.com/2013/03/02/montage-homebuilding/

Thank you,
Raphael