Tuesday, October 13, 2015

Modular Housing Industry Needs to Get Off Its’ Butt Now

Last week the NAHB released the latest figures on modular housing in the US and it came as a shock to many in the modular housing industry that our market share of new home starts dropped from 3% to 1.5% last year.

All along we have been asking ourselves what we can do to raise our market share to 4 or even 5% and the whole time it was actually, according to the NAHB, falling to half what it was.

I’ve been looking around and can’t quite put my finger on it. I’ve reached out to some of the modular home industry’s most knowledgeable people and they were just as mystified as me. Nobody has seen such a reversal of fortune for our industry.

Last year I wrote an article entitled Modular Housing’s Fallen Flags featuring all the factories that had closed after the 2008 housing crisis. Many well-known companies fell by the side of the road. 

Today I see modular factories shuttered and several running well below the capacity needed to break even.

That would explain the 1.5% but it doesn’t explain the reason we have dropped to almost becoming a non-player in the new home market.

Have we become an industry losing its way? We have no regional or national marketing presence. 
We have no industry promotions enticing site builders to become modular builders. We have no industry training for new sales reps, set crews and code enforcement people. We do seem to have a lot of excuses though.

I could go on and on but you get the picture. We are neither planning nor preparing for the future and that is all of our faults.

Excuses range from lack of interest to lack of anyone leading the effort to a lack of marketing expertise to what we point to first, a lack of money.

None of these are correct. We have the people, we have the knowledge and we have a source of money. What we don’t have is the heart to fight.

The Modular Home Builder Association, MHBA, is ready, willing and able to champion our cause but it needs more factory, builder and especially associate members to join its ranks.

Modcoach holds Builder Breakfasts and Boot Camps and many more are being planned for next year in New England, New Jersey, Pennsylvania, Virginia and Indiana. But I need more participation to continue them.

Here is an example of the apathy within our industry. The October 21st Builder Breakfast will feature the State Modular Housing Directors from MA and PA along with Stan Weaver. They will speak and answer your questions about code, set crews and just about anything else you want to know. You would think that factory people and builders would jump at this opportunity to meet them one on one and participate in an Open Forum but that is not happening. Only a few factories have signed up and just 2 builders.

Click Here to learn more about the October Builder Breakfast and make your reservation.

You want to know why our industry is losing ground to site builders. The answer is simple. We don’t do anything to help ourselves. Factories sit around like its 2008 trying to figure out how to squeeze more homes out of their builders while those same builders are worrying more about how to pay their bills than actually working together to grow our industry.

Tom Hardiman, Excutive Director of the MHBA, and I, Modcoach, are willing to lead the charge but every time we look back to see where the troops are we see the same faces while others are sitting on the sidelines cheering us on but won’t take the time or effort to join the battle.

1.5% should be tattooed on everyone’s forehead that doesn’t answer the call to arms.


Anonymous said...

Coach, for someone who has no clue, you sure seem to have a lot of answers.

Unknown said...

Modular Building is not a "Design Driven" Business it has been a "Methods Driven" Business for 40 years, but this is old news now. Once the home is complete people don't much care how it is built, they care what it looks like. Market Share will never grow until "design control" is job one.

Douglas Cutler R.A.

Anonymous said...

Mr Cutler I agree with your premise that "design" plays an important role in the public perception of the modular finished product but "design" needs to be compatible with the "methods" employed for factory production or factories and builders need to accept the utilization of hybrid construction on the site to allow more complex final design features.

I,also, agree that factory design teams could and should do more to promote more than a "double-wide" look in many parts of the country.

Al Grust said...

Before the slow down I did nothing but modulars, when the bottom fell out of the market I found other work and from time to time sold a mod mostly from references from old clients. This week I took delivery of a simple ranch that came with a preframed porch. We found that porch stuffed in the living room along with the gable ends, collar, ties, sheetrock, and all the siding. It took 7 of us an hour and half to pull this mess out of the LR and cost me 1-1/2 hours of extra crane time--Strike one, The fit and finish of the framing is terrible, overhangs are crooked, rim joist go every which way, on one box the bridging goes from 2x10's to 2x8's to 2x6's ??? I guess they ran out of 10's ?? Strike two. I called the sales rep. and got ba, ba, ba STRIKE THREE !!! no more mods for me it's not worth the trouble. And you wonder why sales are dropping ---I don't!
Al Grust
Country Manor Homes