Modular

Factory-built housing has come a long way since Carl Severe entered the industry in the 1960s. The metal-sided “can-dominiums” with glued-on paneling and cheap appliances of yesterday have been replaced by attractive, energy-efficient dwellings replete with tile showers and fireplaces.

“Today, when you go into a manufactured home or a modular home, you can’t tell the difference between a site-built house and a factory-built house,” says Severe, an industry consultant who has worked for several manufactured and modular home builders. “A lot of the stigma of the old days has worn off. People see manufactured housing as a valuable product.”

Manufactured home shipments rose to an annual level of 92,981 in 2017 and have been growing each year since they hit a trough of 49,789 in 2009, according to data from the Manufactured Housing Institute. Lending to that growth is factory-built housing’s reputation for affordability, due to efficient factory production processes, and speed: Manufactured homes can be built in a week and quickly delivered and assembled onsite.

So, how can factory-built housing retailers and manufacturers differentiate themselves as speedy delivery and reasonable costs become common features in the industry? By touting markers of their homes’ quality, such as home performance and comfort.

Building a reputation for efficiency

For retailers like Patriot Home Sales in Kinzers, Pennsylvania, propane heating and appliances play a central role in delivering that high-quality product. “We try to promote efficiency to lower the consumer’s cost,” says Bob Broderick, owner of the company that sells about 75 homes a year, about 80 percent of which are modular homes built on permanent foundations.

Patriot typically sells homes with efficient building envelopes that use 2×6 walls with R-21 insulation, a minimum of R-38 ceiling insulation, and efficient windows. And the homes are most often heated with a high-efficiency propane furnace. “We encourage customers that we feel the most affordable heat today would be high-efficiency gas,” Broderick says. About 80 percent of the region Patriot sells to (in Pennsylvania, Maryland, Delaware, and New Jersey) does not have access to natural gas, so the company recommends customers purchase a propane tank, which can be buried for aesthetics.

Although Patriot’s homes are generally in a more affordable price range, Broderick stills sees many customers who opt for upscale propane amenities such as fireplaces and gas cooking — about two-thirds of customers choose to cook with propane, he says. “You’ve got instant heat, where with electric you’ve got to wait for it to warm up,” he says of gas cooking’s appeal. “And when you turn the gas off, it’s off. Sometimes you have to be cautious with electric stoves because the burner is still hot.”

Broderick practices what he preaches from an efficiency perspective by heating about 20 model manufactured and modular homes in the onsite sales center with propane furnaces, providing ongoing energy cost savings.

Flexibility to say yes

While retailers are on the front line selling the quality story to customers, they rely on factory builders to turn their customers’ dreams into real-world tile and drywall. Being able to deliver whatever a retailer sells can be a big competitive advantage, says Sam Hollister, general manager of Eagle River Homes in Leola, Pennsylvania.

“We cut our niche in the market being a flexible company and doing a lot of customization,” Hollister says. Retailers find great value in a builder partner who can flip or stretch a floorplan, or move a kitchen plan from one home to another, especially when today’s educated homebuyer comes to the sales center with a specific vision in mind. “Instead of saying ‘No’ or ‘I have to get back to you,’ they can say, ‘Yes, my manufacturer can do that for you.’ If you can say ‘Yes’ to that customer, you can give yourself a lot better chance of getting that sale.”

“If you can say ‘Yes’ to that customer, you can give yourself a lot better chance of getting that sale.”

So, with retailers like Patriot Home Sales touting the efficiency and comfort of propane amenities, Eagle River distinguishes itself by allowing them the flexibility to offer any gas upgrade. “Gas has become such a big part of not only the heating but the appliances,” Hollister says.

“Years ago, oil dominated the Northeast for a heating source,” he says. “Now it’s propane. Gas is cleaner, it’s more efficient, and a lot of the communities we sell homes into, they really have gone away from the oil tanks because of the potential liability there if you have an oil tank leak in the community.”

Most homes Eagle River builds are heated with gas furnaces. Many use gas water heaters, and, like Broderick, Hollister sees many homes that include propane ranges and fireplaces. “People realize the fact that with wood-burning fireplaces, you do get some heat, but it’s dirty, it’s time-consuming, and you’ve got to take up room for that wood. Where with gas, you can flip a switch and you’ve got heat. You’ve got the ambience without the mess.”

Eagle River’s annual sales of roughly $40 million, or 770 homes, are primarily in communities or suburban areas without access to natural gas. So the builder offers the flexibility of building with electric or oil-based systems. But homeowners today are usually opting for heating that offers better comfort and the best efficiency, Hollister says. “It’s prominently propane.”

Published December 11, 2018

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