In factory housing, there's a trend toward homes a la modular
A cacophony of screaming table saws, thudding staple guns, and an intermittent hammer beat - it's music to Robert Killkelley's ears. ''This is the busiest month in our history,'' he shouts over the din. The Marley Continental Homes modular house factory, where Mr. Killkelley is vice-president of sales, is operating at peak capacity, churning out 13 homes a week.Skip to next paragraph
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In fact, of the three kinds of manufactured housing (mobile, panelized, and modular), modular has weathered the recession best. Manufactured housing makes up some 35 percent of the total housing market, and modular alone accounts for about 5 percent of the market, some 53,000 units in 1983, according to the Red Book of Housing Manufacturers.
''Modular has never been a big segment,'' says Donald Carlson, editor of the Automation in Housing trade magazine, but ''modular is hotter than it has been for five years.''
Modular housing production was up 35 percent for all of 1983. And the potential for continued growth is strong: Modular is affordable to the middle-income market and is profitable in the relatively untapped rural market. Forecasts for the first quarter of '84 predict a 35 percent rise over the first quarter of last year, according to a survey by Leo J. Shapiro & Associates, Chicago market researchers.
Modular housing received an important stamp of approval last year when the Houston-based U.S. Home Corporation, the nation's largest on-site builder, bought Interstate Homes, in Salt Lake City, the fifth-biggest modularmaker. Analysts say U.S. Home is in the market for more factories. It is looking for a foothold on the rural home-building market, Donald Spear, editor of the Red Book of Housing Manufacturers, speculates.
In an era of high interest rates, the modular home has the ''all-important advantage of speed,'' says Mr. Carlson. ''That's where the money is saved. On a big development, finance savings alone can reach $100,000.''
A site-built home can take three to six months to complete. Meanwhile, the builder is stuck with financing the house until he can finish it and find a buyer. But a modular home generally has a buyer, and it can be built and ready for occupancy within a month or less.
Factory-built homes are sold through a dealer network comprising mostly builders, not by the parent company. The builder-dealer sells the product to the customer (either from a catalog or a model home), arranges financing, and often does the site work (clearing the land, pouring the foundation, and finishing carpentry). Factory workers transport and place the house on the foundation.
The result is substantial savings to builder-dealers, who no longer have to find, manage, and maintain a host of carpenters or subcontractors. Concern over materials shortages, on-site theft, and cost overruns is virtually eliminated. The price of the home, once contracted with the factory, remains fixed. The builder only carries the financing for as long as it takes to build the house.
The modular home arrives in two or more sections, 95 percent complete: Carpeting, appliances, plumbing, electric heating, and even doorbells and light fixtures (including bulbs) are in place. The builder must simply landscape, hook up plumbing and electricity, and do some minor carpentry.