Tuesday, August 7, 2012

The Death of a Homebuilder

The face of new home building is rapidly changing.  The days of the small builder are numbered.  If a builder only builds 2 or 3 average sized houses a year, why is this any better than the builder getting a job for $20 an hour and having benefits?

There will always be the builder that likes to make sawdust but there will not be enough skilled itinerant workers to fill the positions needed for these builders.  Australia is a prime example of how the lack of skilled tradespeople is pushing their housing economy back into recession.

Enter the logical solution…system built housing.  By taking all the skilled jobs and putting them under one factory roof, the small builder can actually be saved from extinction.  The problem with this is that the system built industry doesn’t know how to get the message out to either the builder or their customers.

Beautiful websites like Simplex’s is a great start.  Nationwide’s homes at IBS every year is a great start.  But that’s all it is…a great start.  What is the next step?

Right now there is no next step.  Modular home factories want builders to join with them but have no dedicated marketing plan to attract them, builder introduction programs or “new to modular” training available.  The NAHB Building Systems Council does good things within our industry but they have no teeth when it comes to promoting our industry.

I hear everyone in the systems built industry say that this is the way of the future.  Only trouble with that statement is that the only people that really know this to be true are inside our industry. 

Factories leave the whole process of finding and educating small builders entirely up to the sales manager who sends out the sales rep on foraging expeditions only when things get slow in the factory.  Considering that it takes about a year to bring in the first order from a “new to modular” builder, the sales manager’s knee jerk reaction is almost always doomed to failure.  Frustration sets in and everyone looks at each other with fingers pointed.

Well, here I am pointing my finger.  If modular homes are so much better than site built homes, then who is out there telling this to the customer?  The factory owner…no; the sales manager…no;  the sales rep…no;  the non-existent factory marketing department…no;  The Building Systems Council…no; anyone besides Sheri Koones…no!

Honestly, when was the last time you saw an ad for modular housing on national TV?  Factories have Facebook pages with upwards of 1,500 “likes” but these are mostly industry people. 

If our industry is ever going to move out of the shadow of mobile homes and trailers, this is the time.  Today’s factory owners are the best that have ever been.  They’ve survived a recession, trimmed their staffs, become super efficient at buying and have learned production procedures that will help them continue being successful as housing recovers.

What we need now is for these same people to begin an organized approach to marketing their product to the general population and design programs to help small builders become bigger builders.  They need to step outside of their comfort zones one more time and get this started.  It will benefit everyone.


lavardera said...

Hmmm. You scoff at "California Lego Builders" but many of them have done just what you are suggesting. They've taken their sales right to the customer, and the local builder was more of an adjunct to them getting the house set and buttoned up - rather than being the source of the sale.

Coach said...

I'm really not trying to "scoff" at the Lego people, I'm just saying that the way they go about building a home is no different than what a stick builder does except that they build they build it in a garage and ship it to the jobsite. There are no savings in either production costs or time. In fact, I would bet that building a home on cribbing in a small warehouse actually costs more than a site built home.

Anonymous said...

Coach, you are exactly right about this.

Why do you think there is such a gulf between the factory builders in the east and architects? Why do architects have to build houses on cribbing in small warehouses?

Do you agree with the thesis here:

Lessons of the Factory

Why does this problem not exist in Northern Europe?

Keep up the great blog!