Tuesday, November 18, 2014

Putting a Positive Spin on Modular’s Low Numbers

A while back I wrote that the modular housing industry has slipped to 1.3% of the total New Single Family and Multi-family housing. That number is probably still fairly accurate but there is more to this than first meets the eye.

Included in the total number of new home starts are the huge tract home builders like Ryan, Toll Brothers and others. You also have to look at the number of multi-family living units being built being started by big developers. Very few and I mean an almost none of them are modular.

So here comes the spin. What is left after taking these site builders out of the equation are small and medium regional tract builders that usually start less than 500 homes a year. A couple of them use modular for some of their work but again, most don’t.

That leaves independent new home builders. This is where you find almost all of the modular home builders. Depending on which region of the country you talk about, the number of modular homes vs. total homes built by small builders shows a different picture.

New England including New York leads the pack with amost 40%. The mid-Atlantic States is approximately 32%, the South comes in about 30% and the mid-West about 21%.

Now these are numbers we can begin to like. There are some states however within these regions that could do better. Whether it is tougher code enforcement or home buyers not understanding what a modular home is, these numbers can be improved. Maryland comes to mind as one state where the share of modular housing is not where it should.

By breaking down the numbers and getting the different builder segments isolated, you have some numbers that really don’t appear so bad.

1 comment:

Anonymous said...

Where do you get the statistics you use to calculate industry share? How accurate are they?