Monday, May 13, 2019

Modular Factories May Weather the Next Housing Recession Quite Well

A number of market analysts have pointed to signs of weakness in the U.S. housing market as an indicator of a possible economic recession ahead.

Many factors are contributing to their predictions including a slowdown in new home permits, increasing material costs and a shortage of skilled construction labor.

There is nothing the modular housing industry can do about people getting building permits or the rising cost of materials but we can start planning right now to exploit the other main factor, skilled labor.

After the 2008 housing recession many modular home factories began adding more commercial projects to keep production lines running to provide at least minimal profits and keeping the doors open.

This time those factories are already doing commercial and have strong builder networks in place. They also have a skilled labor force that is ready, willing and able to complete both homes and projects without much additional manpower.

When, and that is still a big question the next recession hits, our site built siblings will take it on the chin one more time. When their source of new home buyers begins to dry up they will have few options to choose from to stay in business.

Modular factories and their builders should be able to leverage that into maintaining their current levels of production simply because we exist. And we exist with a huge infrastructure of builders and developers as well as a labor force to complete the work.

The same can’t be said for site builders.

The modular housing industry needs to realize just how advantageous this next recession could actually be to securing our future and expanding our percentage of new home starts.

Wouldn’t it be great if suddenly we were the only constant in new home building.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker.

1 comment:

Jacob Ruble said...

Coacj, what a great observation about modular housing. I hadn't thought about a recession as a time for grwoth but it really makes sense. How do we start?