When you look these new homes being built in Hardin Valley located near Knoxville, TN, it’s hard to believe they are from Clayton Homes. Since 2015, Clayton has acquired seven site building companies across the country to expand their brand beyond prefabricated homes.
Clayton is the largest manufactured housing company in the country with about 50 percent market share. So why move into site-built houses instead of using modular construction?
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| Check out the size of the dumpster. You don’t usually see that on a panelized house site |
It is interesting that instead of trying to build custom modular homes Clayton has chosen to build their new homes the old fashioned way. Let’s hope they are at least using panelized walls. But that doesn’t seem to be the case when you look at the picture of one of their new site built homes being erected.
You have to wonder why Clayton would site build instead of using a modular approach. The answer could be a simple as Clayton doesn’t really know how to build custom modular homes and doesn’t seem to want to learn. Custom is a completely different animal than the standard ‘house plan’ homes Clayton builds.
Related Article: Clayton Homes, “America’s Largest Homebuilder” is Total Spin
In 2016, Clayton acquired Nashville home builder, Goodall Homes. They’re in the process of building more than 220 homes in the Knoxville area, pushing the Clayton brand in East Tennessee beyond it’s well-known manufactured homes.
Their plan is to continue expanding into the site built home market.
While many of the same materials are used to build the manufactured homes and the site-built homes, the main difference is where they are built. Manufactured homes are built in a warehouse and transported to a lot while site-built homes are built on the lot.
The majority of Clayton’s business around the country still comes from their prefabricated homes. This year, Clayton will build an estimated 50,000 manufactured homes compared to 4,000 site-built homes.
Since 2015, Clayton has acquired seven on-site home building companies:
– Chafin Communities (2015 – Atlanta)
– Goodall Homes (2016 – Nashville, Knoxville)
– Summit Homes (2016 – Kansas City)
– Oakwood Homes (2017 – Denver, Colorado Springs, Salt Lake City)
– Harris Doyle Homes (2017 – Birmingham, Auburn)
– Brohn Homes (2018 – Austin)
– Arbor Homes (2018 – Indianapolis)
MODCOACH NOTE:
I put this article on Linkedin and got the following comments. Not in any particular order.
Comments from LinkedIn:
C.J. Spofford
Inventor Shim-pull Installation System for Building Industry
It is just a wild guess, but I am willing to bet that they are doing time studies and cost analysis for all methods of construction. If so, they will be able to determine the most efficient and effective way to get from point A to point B which of course will give them many competitive advantages. Would you expect anything less from a Warren Buffett organization?
Gary Fleisher
Editor of Modular Home Builder
Robert Bulla I agree that if anyone can be successful building tract houses better, it should be Clayton. What I don’t understand is why Clayton is using 60 year old technology.
Robert Bulla
Sales Manager at Clayton Homes
Gary Fleisher my understanding is like Buffett they are buying great companies with great management that continue as they were only now with better resources. Then encourage to find ways to improve and adapt using the core knowledge and economies of scale brought in by Clayton
Ken Krantz
It’s more important to find out WHY we do things than what and how we do them.
Look out America…………here comes more mobile manufactured homes.
Vernon Miller
TENNESSEE MODULAR
System Built Housing is not mobile homes.
Big difference there Ken..
Patricia Russell
CEO of Casa Duro
Vernon Miller we’ve engineered our homes to resist 325mph winds, I don’t think mobile manufactured homes can match that.
C.J. Spofford
Inventor Shim-pull Installation System for Building Industry
I believe that you had the answer in your original statement when you mentioned panelized walls. I honestly believe that they will ultimately end up being able to produce all types of structures utilizing the most efficient methods from fully built modules, all the way back to stick-built depending on the opportunity. They will know the most efficient way to complete the task.
Tim Alexander
“Never Lose Power Again”
Why lose the opportunity to build a home if you have the capabilities of stick building and the customer won’t have anything to do with modular, go for it.
Good for Clayton Holmes.
Gerard McCaughey
ENTEKRA – Fully Integrated Off Site Solutions
https://youtu.be/tvNyoJkBvkQ via @YouTube
Steven Lefler
Vice President at Modular Lifestyles, Inc
My 2 cents..
I really do not know the why but I would suggest the Original builder had Open “Permit To Build” to finish after CLAYTON made their acquisition.
Just Saying
Ken Krantz
It’s more important to find out WHY we do things than what and how we do them.
Clayton builds manufactured homes… Some companies do off site panelization components for homes………..Some companies do off sit modular sections for homes. The one thing they all have in common is………..They are all made with wood and has been done this way for the last 60 years. WHERE IS THE INNOVATION?
Jason Bos
Modular & Traditional Construction Professional
Seems to be standard operating procedure for CMH/Berkshire. They are very good at vertical integration they have been doing it before Silicon Valley. Everybody knows if you want to put more offsite products in the market you MUST have a developer partner or own a seasoned development company. Great work CMH, keep advancing the industry!
Robert Bulla
Sales Manager at Clayton Homes
Clayton like our parent Berkshire buys great companies and implements policies that consistently looks for ways to increase efficiency and scale. You will see continued improvement as these opportunities are realized.
Andrew Crosby
Developing Houses Building Futures
Is it simply more profitable for them this way?
Jason Reints
Sales Manager – Building Automation (RANDEK Prefab, Panelised & Modular Building manufacturing equipment)
From memory they have said it’s an expansion strategy
KEITH HADDING
Consultant at South Bay Developers
I don’t agree, I see them grabbing larger shares of the market however quality and efficiency seem to escape them. Warren made a good move in gathering the largest share of manufactured homes which support his lender programs and vice versa. But it’s not how good it is, it’s how big and what do they lend other forms or streams of income.
Rich Foreman
Owner at Titanium Tiny Homes & RJF Transport
Being a contracted Transport Co for Berkshire and Clayton Homes Nationwide,The manufacturing aspect of things cannot facilitate the demand of their product. This above in my opinion is another affordable solution to keep sales over passing them onto the next Competitor. They’ve been offering these type homes in target area states for quite some time. They’ve many crews working. Not much W. Buffett does will be a failure or make a decision that will be here and gone in a day with the Elite Management,Marketing,Sales,Warranty,Customer Service,And Real Estate world. they possess. Top notch employees.Also Their market and quality,pricing differs from most manufacturers.Were proud to say were an affiliate an honored to work aside this Company on a daily basis. Just good wholesome,down to earth professional staff on every level, everywhere we go.Ive always said,”Buffet took Vows to the business world”,Hell be successful til death do him apart.
Gerard McCaughey
ENTEKRA – Fully Integrated Off Site Solutions
It’s really very simple: https://youtu.be/tvNyoJkBvkQ via @YouTube
Kevin Oakley
Marketing Strategy & Execution Expert
They will most certainly go all in on modular when the next market turn hits OR customer can no longer tell a difference… whichever comes first.
Ken Krantz
It’s more important to find out WHY we do things than what and how we do them.
The decision to do this must have been made in a corporate board meeting.
Gary Fleisher
Editor of Modular Home Builder
Gerard McCaughey, you should get them to look at your FIOSS system. They obviously could use it.
Gary Fleisher
Editor of Modular Home Builder
If a modular home factory in a small town in central PA can turn out custom homes of this quality I simply don’t understand why one of the largest factory built manufacturers in the world wouldn’t do it for all their IRC communities. http://www.modularhomecoach.com/2018/08/another-stunning-example-of-custom.html
James King
General Manager at Clayton Homes
With Clayton Homes producing its own building materials in house including lumber and windows, without excessive overhead and middlemen, now available to these site builders, cost advantages are substantial versus traditional material procurement. As well, the Clayton homes focus on ways to maximize efficiency and reduce waste will pair with lower material cost to offer a distinct advantage for traditional site builders under the Clayton umbrella.
Pamela Bell
Innovation in New Zealand’s built environment.
They also said it is about ‘cross-pollination’ and taking learnings from each side (site-based and offsite) to create construction innovations… They are a polished operation – it will be interesting to watch what they learn.
Patricia Russell
CEO of Casa Duro
I think the time will come soon that the cost to build woodframe construction will far exceed modular and it will be more an artisanal sector of construction. This is just my opinion based on my research of this market sector.
