I asked the owner of Homes by Keystone, a small 50-year-old family-owned modular factory in PA if he would rather build custom homes for his customers or simpler homes from the company’s plan book. His answer was exactly what I had expected.
America, once the dream of home buyers getting some land, and building a small home with a white picket fence for their family, has turned into communities of almost affordable housing projects. Villages of tiny houses and even garden sheds converted into homes being built without permits or meeting building codes are popping up across the country.
The dream started after WWII when veterans returned home and needed housing. Forward-thinking developers founded Levittown projects on the East Coast providing small, quickly produced homes without garages and other options. They were very successful and thousands of these homes were built.
52 years ago, my new bride and I bought a simple 2 bedroom, 980 sq ft home in my hometown and we paid $16,000 for it. It was a great starter home where our son was born. It had a small yard, and no garage or deck but it was perfect.
Today, simple projects like Levittown have been replaced by tract home builders erecting 2,200 sq ft mansions in the half-million-dollar plus range. They are also producing affordable townhouse projects with hundreds of identical designs in the $200-400K range.
Even those prices are not keeping people from contracting for homes well into the future as construction is being pushed to produce more.
And all this brings us back to my question for the factory owner.
He told me back in the 1970s, modular homes were mostly ranches and cape cod homes with unfinished 2nd floors. Easy to build and you knew your costs and profit before they hit the production line. In fact, his 40,000 sq ft factory with two lines could regularly build 270-300 homes a year in the 1980s.
Today he’s lucky if he can get 6 homes a month out of the factory due mostly to getting state approvals and the increase in customization required. Special order this and special order that is killing him.
Modular home builders are demanding more custom and complicated construction for their home buyers. A home leaving the factory in the ’80s was about 90% complete including its heating system and finishing it after delivery and set only took a little over a week before turning over the keys to the new homeowner.
Now those custom homes are requiring substantially more work at the job site. Some homes leaving the factory are only able to be built to 50-60% completion because of all the on-site work needed to be completed by the builder.
With inflation, shortages of materials and labor, and added regulations, the builder is now the one in the hot seat trying to source materials and paying higher prices than they had budgeted. The modules leaving the factory had a known cost attached to them but what is happening at the job site to finish all that custom work is killing many builders’ profits.
And that’s not even the worst part. Local, state, and federal building codes, impact fees, permit costs, regulations, inspections, and reinspections are now 25% of the total building costs of a new home.
We will probably never see those perfect set of occurrences again that produced Levittown and allowed new home buyers to be delighted to own a new home at a truly affordable price but one can always dream.
Sadly, those bygone days of the independent builder are also about gone for the modular factory. Young people are not interested in becoming a hands-on, making sawdust, kind of home builder. That is one reason many many modular factories, both old and new, are catering almost exclusively to developers and special projects.
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder. Email at [email protected]
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