Making the Move to Modular

Speedy construction and energy efficiency are among the advantages of prefabricated homes. But is this construction trend right for your clients? This Q&A will help dispel myths and give you footing to advise your clients.

August 14, 2013

There are numerous misconceptions when it comes to prefabricated homes: They’re nothing more than fancy mobile trailers. They’re only slightly sturdier and bigger than a cardboard box. They can’t be customized. They’re tough to insulate, and far from green.

Well, I’m here to tell you that’s all hogwash!

It’s time to dismiss stereotypes about prefabricated single-family housing and take a look at the latest generation of prefabs, which are strikingly contemporary and even glamorous. Today’s modular homes are also energy efficient, hurricane and earthquake resistant, sustainable, customized, and competitively priced with other comparable designs.

This Q&A should help you advise your home buyers on the options available in modern modular homes:

Q. What are the main construction methods today?

Modular homes are constructed from manufactured components in a factory. Champion Home Builders, which began as a mobile home builder, constructs modular wall, floor, and roof components, says Kevin Flaherty, vice president of marketing. Completed modules vary by size due to state transportation rules, but average 16 feet wide and 76 feet long, Flaherty says.





Panelized homes use manufactured panels with insulation installed from the get-go. Architect Alexander Kolbe, cofounder of EVOdomus, a modular home building company based in Cleveland Heights, Ohio, says he prefers this technique because it allows his company to insulate its proprietary panel systems with a high thermal performance (R-value) cellulose insulation. They’re also less limited by the height restrictions when trucks transport their components.

Some modular manufacturers get around shipping restrictions by designing collapsible systems that are popped up at the location. Champion, for example, can unfold roofs on-site.

Q. How big is the modular home market?

The number of modular homes hovers around 2 percent of the roughly 400,000 single-family houses built in the United States annually, according to the U.S. Department of Commerce.

Q. Why is the niche still so small?

Experts say the construction industry has been slow to evolve. Steve Linton, president of Deltec Homes, which has been designing and building prefabs for 45 years, says he expects momentum will build as the public becomes better educated. Kolbe agrees: “When I ask a home buyer if they’d have a Bentley [car] built in their muddy backyard in the rain, they say, ‘Of course not,’ and understand why a home shouldn’t be built that way, either.”

Q. What else might spur growth?

Speedy completion, says Donna Peak, executive director of the Builders Systems Council at the National Association of Home Builders. The advantage of fast construction has only recently been recognized, sadly, due to the need for housing after major natural disasters such as Superstorm Sandy. Since then, the NAHB has been deluged with information requests, Peak says. And Hurricane Katrina in 2005 put the prefab Katrina Cottages on the radar as an affordable alternative, says its designer Marianne Cusato. Prefab also became associated with home variety and innovation after the Museum of Modern Art in New York mounted its “Home Delivery: Fabricating the Modern Dwelling“ exhibit in 2008, which showcased the genre’s long history and also allowed visitors to tour five life-size prefabs.

Q. How much construction time can a prefab save?

Months—though weather, the experience level of the crew, and the design’s complexity can affect assembly time, according to architect Erla Dogg Ingjaldsdottir, a partner at MNMMOD. But overall, construction is becoming faster, says Kolbe, who has seen construction time drop from between nine and 12 months to three or four months for a 3,500-square-foot prefab.

If your clients are going the prefab route, Mark Stapp, real estate professor at Arizona State University’s W.P. Carey School of Business, recommends that you confirm whether community building codes demand additional requirements for prefab drawings and construction, which might delay the construction process.

Q. What are other advantages to modular homes?

Linton points to higher quality control, since work is done indoors without nature wrecking havoc. A smaller work crew can be used as more construction takes place before site assembly.

In addition, there’s usually less waste, less theft on site, and less noise for neighbors with prefab homes, Kolbe says. Another advantage is energy efficiency, a prime reason Matt and Eileen Cooper built a 2,100-square-foot prefab with Scott Homes two-and-a-half years ago. They’re saving $30 to $70 per month on utility bills, largely due to a ductless heat pump.

Q. What about cost?

Overall, prefabs usually cost less than site-built custom homes but more than production houses (subdivisions). Kolbe says their modular homes range between $250 and $325 a square foot as compared to $225 to $275 for a similar production house. But he finds it hard to compare the two, “since the walls we design are twice as thick as many comparable homes and have triple-glazed windows.”

Price also depends on a modular home’s design complexity, as it does with any home, as well as area labor costs and site work. But because much of the construction work is done in a factory, buyers get the advantage of economies of scale. Employees can move from one piece of the house to another, and work on several homes simultaneously, rather than move from site to site, which takes more time, says Peak.

A Deltec package for the shell, including windows and prepainted siding, generally runs $40 to $60 per square foot, but options, transportation costs, and finishing bring total construction to $150 to $200 per square foot, says Linton.

The Coopers built their house for about $165 a square foot, and took advantage of credits for their EnergyStar appliances. The Department of Energy’s Web site lists incentives that support energy efficiency, as does the EPA for green buildings.

Q. Is customization possible?

Yes, says Kolbe, who now works exclusively on custom prefabs. Manufacturers and designers offer a wide variety of styles that run the gamut from traditional to cutting-edge modern.

Q. How can you become an expert in the prefab niche?

Study up on the modular home industry—Manufactured Housing Institute, Modular Building Systems Association, Structural Insulated Panel Association, Dwell magazine, and Greenfab are good resources. Then find out whether these homes would make a good fit in your market. Also, help your clients identify lenders who understand the modular concept and will underwrite a mortgage for a prefabricated home.

Barbara Ballinger

Barbara Ballinger is a freelance writer and the author of several books on real estate, architecture, and remodeling, including The Kitchen Bible: Designing the Perfect Culinary Space (Images Publishing, 2014). Barbara’s most recent book is The Garden Bible: Designing Your Perfect Outdoor Space, co-authored with Michael Glassman (Images, 2015).


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