The West Coast and the East Coast of the US have completely different ideas about single family modular housing and nothing will ever change in that regard.
Those differences come in the way each coast builds, markets and sells their homes.
Let’s begin our journey on the East Coast from Maine all the way through Florida where modular factories have been pumping out custom IRC code modular houses for more decades than most of us have been on earth.
It has often been said that the single family modular industry started in PA almost 60 years ago and that most of the true custom modular factories are still located with its borders.
But that is not what makes it unique. On the East Coast the factories have traditionally used an authorized builder network to market and sell their product maintaining an arms-length distinction between the factory and builder.
As a former sales rep for several East Coast factories 20 years ago I remember requiring builders sign an agreement they wouldn’t use the factory’s name in their company name, on any signage or in any contract with a customer. At least some factories now allow it and a couple actually encourage it.
It was almost unheard of selling a home directly to a customer and bypassing one of the factories builders. And those builders were treated like the golden goose that laid those wonderful golden eggs. Week long trips, dinners and lots of builder gatherings and perks all sponsored by the factories were common.
What was also common were builders that only bought from one factory unlike today when a builder will typically shop a floorplan around to several factories.
The idea of having a modular factory build a truly custom home was encouraged by many East Coast factories. Penn Lyon Homes and Haven Homes were two factories that garnered a reputation for building custom homes. Even today Haven Homes is spoken about reverently in modular home circles.
Distinct lines were drawn between single family home modular factories and all other types of commercial and manufactured home factories. Rarely did a custom factory venture into building commercial projects other than townhouses.
Only 12 years ago sales reps had no problem inviting site builders to visit the factory and converted a lot of them to modular. Many reading this article were among them.
The East Coast modular scene has changed over the last decade and many don’t think for the better. Today those 2008 housing recession survivors are not only building custom homes, most are adding large commercial projects to their production lines. Hotels, condos, nursing homes and dormitory projects ride the same production lines that once only saw custom modular homes.
The pool of available modular home builders has steadily dwindled over the past 10 years due to retirement, death and closed businesses. The factories try to bring in new builders to replace the ones that left the industry but fewer site builders mean fewer that can be converted to modular.
There is no modular industry marketing program for attracting new builders or any training offered after a builder signs up with a factory.
This is not meant to paint a bleak picture of the East Coast modular industry. Far from it. The factories located here are thriving and adapting quite well to the new reality of what builders, developers and commercial investors want.
Look for new modular factories to begin rising like the Phoenix from the ashes of the 2008 recession.
Related Article: New Modular Home Factory Opening Soon in South Carolina
Now let’s travel 3,000 miles West and take a look at what is happening to the modular home industry on the Pacific Ocean.
Going back 20 years to my sales rep days with Champion’s Genesis home division I remember the top brass bragging about Silvercrest homes, those terrific HUD manufactured homes built in California.
They had many competitors in the HUD market on the West Coast selling product that was way ahead of what the East Coast HUD market built.
What was missing however was a modular home factory industry. Yes, there were a couple of true IRC modular factories in the West but they were few and far between. Many sold directly to the customer and were vertically integrated from sales to final finish.
You really didn’t have the site builder drooling over signing with a modular factory simply because most site builders were very busy building stick custom homes or there were simply too many tract home developments going in that few people could find the land to build that custom ranch or two story.
Even today the modular industry is dominated by manufactured home factories and commercial modular factories. There are a few custom modular factories but not enough real custom modular home builders to warrant new factories opening in the traditional East Coast sense.
The West Coast modular industry has recently discovered ‘affordable housing’ with factories like factoryOS and Kasita leading the charge. Even Blu Homes, once the darling of the West Coast modular home investment community, has realized that without a strong builder network it could never become a national brand like it hoped.
Many modular factories on the West Coast are still churning out manufactured homes for community developers.
Living on the West Coast means you can’t simply draw your dream home on a napkin, take it a local modular home builder, have it quoted and built. There is not a real modular home builder base to support it.
We hear a lot about automation in the modular industry but the only place that truly works is in the factory that is building those affordable housing projects where 200 or 300 hundred similar modules are built for a single project. Build, Sell, Repeat.
So the question becomes “Which model, the West Coast or the East Coast, will be the future of single family housing?”
The answer, for the near future is both. Just don’t try to swap them as neither Coast is prepared today to truly adopt the other’s market.
