by Dennis Jones

There is a lot of talk these days about the future of the housing market, and I’m sure we have all had our fill of the housing prognosticators telling us to buy, sell or hold. Without a doubt, the real estate market remains healthy and strong. But as expected, some metropolitan areas that saw unprecedented new home growth and home appreciation over the past several years are now beginning to soften slightly with slower growth rates, homes are staying on the market for more realistic time frames, and many of the major national production homebuilders are reporting a slowdown in their construction activity.

With these ups and downs and various economic indicators, the question remains: What do the real estate tea leaves show for the modular housing industry long term? Down? Up? Steady? Many argue that the industry will experience the same cycles than those of the site-built housing market. Those are usually the same people who say modular housing is exactly the same as site-built housing. Therefore, by association, our destiny will be shaped by the cycles of the housing market. But the truth is modular housing, as a percentage of the housing market, must not follow the same pattern. Heretical you say? Maybe, but think about it. If we were exactly the same then what is the incentive of what we have to offer? Do we not tout the advantages of quality, speed, and overall project cost in the modular process?

Yes, modular housing is and should be treated exactly the same as site-built housing for purposes of mortgage financing, zoning, and building codes, for there is little difference. But out of the million plus new homes built each year in the U.S. we accounted for approximately 3%. I believe the capacity for growth is tremendous in anything but the most dire of economic circumstances. As market conditions tighten overall, this will provide a greater opportunity for the modular housing process to show itself. Labor continues to be in short supply, material costs continue to fluctuate, and both will always remain two unpredictable yet integral components of housing construction.

Above all else, we must remind ourselves that site-builders are our customers too. We must continue to demonstrate how we provide for them and for the homebuyer a higher quality product by virtue of the system we use, and do it in a manner that is cost competitive and faster.

As always, I welcome your thoughts and comments. I can be reached at dennisj@r-anell.com

Dennis Jones
Chair, National Modular Housing Council
President, R-Anell Housing Group