Thursday, March 5, 2020

Manufactured Housing's Move Into Modular Housing’s Market

Last year MHI (Manufactured Housing Institute) introduced the CrossMod manufactured home into the new home marketplace. At the time no-one was taking this seriously… now, everyone should be.

One of these is a CrossMod and the other is an IRC modular home

Well, at least those modular home factories and the modular new home builders that are intent on surviving and thriving over the next 10 + years should be anyway!

I’m talking about the rapid and almost stealth-like introduction of the CrossMod home that was introduced with a name that creates confusion for the factory people and builder but honestly, the consumer couldn’t care less what it's called if they can afford it.

For decades there has been a chasm between HUD code manufactured housing and IRC off-site modular housing. It has always been almost impossible to bridge it and both sides liked that situation.

But things have changed drastically since the 2008 housing recession. Before 2008 you probably couldn’t get a buyer that wanted a custom home to even look at a manufactured home. The word “trailer” or “double wide” were the best weapons modular home builders had to make a sale against a street dealer.

Today a new buyer has entered the new home market. They are the “affordable” home buyers. Basically they are the people with good jobs and decent credit that find site built and modular new single family homes unaffordable. It’s not their fault they can’t afford a new home built to IRC standards as state and local building codes keep getting harder to meet as well as more costly.

Even though they can’t afford a new IRC code home, they don't want a double wide in a manufactured housing community either.

In 2019, the number of homes priced above $750,000 grew by 11 percent, according to Realtor.com, and the number of homes below $200,000 declined by eight percent. That chasm just got wider.

The average price of a new single-family, site-built home with land is quickly approaching $400,000 across the U.S.

According to the MHI, manufactured homes make up ten percent of all new single-family homes owned in America– a number that is projected to increase in the coming years as affordable housing becomes more critical.
Not only is the new CrossMod home looking to build that bridge, the manufactured home factories with the help of Dr Ben Carson, Sec of HUD, are gearing up to put them in every neighborhood in the US.

Modular home builders and factories may quickly see a loss of new home contracts to CrossMod builders that are about to snatch the low hanging fruit from the builders pool of prospective customers.

And have you actually seen the new CrossMod homes offered by Clayton and Skyline-Champion? I have and they are beautiful!

The bridge they are building is aimed at selling to an entirely new type of home buyer, yours! With HUD pushing to remove barriers for CrossMods allowing them into developments and neighborhoods where local zoning barred them for decades, look for new site built and modular home builders sales to begin to feel the pinch.

The CrossMod is not the enemy many in the housing industry think. No, it is just an evolution in housing created by MHI to give more homebuyers a real home at an affordable price, something modular and site builders can’t do when forced by the states to follow tough IRC regulations. It is unfortunate that MHI chose CrossMod as the name for this new type of product but this a marketing game after all and the manufactured housing people know how to play it very well.

CrossMods are a HUD code product and as such follow the Federal guidelines. Not only that, they are financed like your modular home.

If you are in the modular housing industry in any capacity, you have to get the facts about CrossMod and the other new significant regulations, including 4 module 2 story homes, coming from HUD that may have a huge impact on your business.

Join me on March 25th in Lewisburg, PA to learn about all the new things MHI and HUD have planned for the housing industry. It could be the best thing you’ve ever done for your business.

CLICK HERE for details and registration.

6 comments:

Anonymous said...

Maybe the National and Regional developer/builders need to take a closer look at these proposals as well.

Builder Bob said...

Thanks Gary, I never thought about how those CrossMods might be used to pick off our customers that have champagne taste but a beer budget. Now I have something else to worry about.

I know I've tried to make a house plan fit a buyer's budget by removing a lot of options they wanted in their house only to see them buy a used home because they didn't want my stripped down modular home.

If it's true that a CrossMod won't have to get all the state and local approvals my homes need, that could save the buyers a lot of money. I went to Clayton's website and YouTube and you're right, those homes are very nice and I don't think I could ever match their price.

Kevin said...

Gary

Secretary Carson may state he will remove the local zoning barriers however the Constitution through the 10th Amendment transfers those powers to the states which in return transfers those to the political subdivisions of each locality within. changing or removing the 10th amendment powers wont happen overnight, and maybe never given its broad implications to the states police power.

"States have the authority to regulate the use of land through the police power conferred to it by the 10th Amendment to the US Constitution. States often delegate their police power to local governments, such as municipalities and counties."

Now the locality may permit such, however the Federal Government can not, as such having to change every Zoning Ordinance in every local government in every state is not a easy task given how politicalized zoning has become.

Don't get me wrong, a problem existed and a solution was found, so kudo's to those thinking outside the box of "We have always done it this way" however Politicians wanting something and making it happen are two entirely different processes.

Thank you for permitting me to comment.

Anonymous said...

Kevin, SEC of HUD, Carson is looking to add an additional discrimination to the Fair Housing Act showing R1 and restricted neighborhoods cannot outlaw types of housing (CrossMod) simply because the people that want to live there can't afford any other option to live in a desirable neighbohood.

The Fair Housing Act (Title VIII of the Civil Rights Act of 1968) introduced meaningful federal enforcement mechanisms. It outlaws: Refusal to sell or rent a dwelling to any person because of race, color, disability, religion, sex, familial status, or national origin (or financial situation).

Anonymous said...

The CrossMod concept and MH Advantage mortgages were lobbied and based on many state and local statutes and court cases allowing local jurisdictions to place aesthetic restrictions on design and foundations for HUD product. The designs and and restrictions were incorporated into the programs. More interesting is the recent changes in MH Advantage if the removal of the garage/carport requirement based on the additional costs for HUD mfg and dealers. Wish it was that easy for modular mfg and builders!!

Anonymous said...

Everyone here is complaining about Carson wanting to change this, but it will help modular also. Example - One of the fastest growing counties for residential housing in the US is Rutherford County in Tennessee, and they have the same restrictions for Modular homes as they do Manufactured Homes. So it will open up more markets for Modular Housing also.